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15 July, 2021 0

How Much Will My Personal Umbrella Insurance Policy Cost?

Personal umbrella policies act much like those written for businesses. How much coverage you need will depend on your circumstances and what factors influence your individual degree of risk. Everyone carries some degree of risk. It’s important to know how much your general liability policy covers and if an umbrella policy will provide you the protection you need to maintain financial security. Many people don’t realize their level of risk until it is too late and they are paying out of pocket for damages their standard liability policy didn’t cover.

Factors Affecting the Cost of Umbrella Insurance

Because an umbrella policy is intended for any additional settlement costs that are over and above your standard liability policies, they are sold in larger increments. In most cases, these increments range from $1 million to $5 million. The more coverage you choose, the more you will spend on premiums. The key is you need to have enough coverage to cover your valuable personal investments.

The risk factors used to determine the amount you choose can include owning a swimming pool, ATVs, and trampolines. Teenage drivers and owning a dog are also possible risks. Distracted driving accidents and dog bites can be prevented to an extent, but they can be devastatingly costly when they occur.

Requirements for Umbrella Insurance

Umbrella insurance doesn’t necessarily work unless you have other forms of liability policies already in place. To qualify for an umbrella policy, you will need to purchase a home, auto, motorcycle, boat, or other types of liability coverage. You will also need to have a sufficient amount of coverage through your other policies.

It’s important to know how much coverage you have with each type of liability policy you have in place. Your insurance agent can tell you how much coverage you have and how much umbrella coverage you need depending on your specific risk factors.

How Does Umbrella Insurance Work?

Umbrella insurance picks up where your other liability policies leave off. A good example is if you are found liable for a person’s injuries and must pay $1 million. Your home or auto insurance may cover up to $300,000 of the damages, but the rest will come out of pocket unless you have a personal umbrella policy. With an umbrella policy in place, it will cover the additional $700,000 so that you won’t have to come up with it on your own.

The fact is, if you don’t have a personal umbrella policy in place and you are found responsible for a person’s injuries or property damage, the amount you are forced to pay out of pocket can be catastrophic. It may take you many years to pay off the debt, leaving you close to bankruptcy. The best way to prevent this scenario is to invest in a personal umbrella policy that covers you on every level.

Even though insurance can be confusing at times, but it’s easier to understand if you learn the basic mechanics of how your liability policies work and the added benefits of having a personal umbrella policy. You will have questions and concerns that must be addressed. Don’t let them go unanswered. Visit the agents of Fuller Insurance Agency today. You can also call our office. We have the answers you will need to make an informed decision about your risks and whether or not a personal umbrella insurance policy is right for you.

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