Monday, December 3, 2012
General insurance policies are not sufficient enough to cover all the losses and damages incurred as a result of everything that might happen. Sometimes those insured may not realize that not all their precious items might be covered. In this way, policyholders may feel underpaid as they have paid into premiums but not everything was covered, or the monies they receive from their lost items might not be enough to replace the item.
Umbrella insurance covers important aspects that would otherwise not be met by the standard insurance policies. It is a form of protection insurance that ensures that policy holders will have “coverage gaps” filled by their pre-existing insurance policies. Umbrella insurance is sold in increments of one million dollars. For example, if a home insurance policy has a limit of $500,000, with additional umbrella insurance, the home insurance policy is now covered at $1,500,000.
Umbrella insurance therefore becomes very important in ensuring that individuals are well compensated as a result of any loss. This gives the individual an opportunity of added protection in addition to having the other policies of homeowners, auto or even watercraft insurance policies.
Umbrella insurance amounts are dependent on the particular insurance company. The amount ranges from one million to five million dollars. The amount is added to the normal insurance policy held by the individual. This insurance arrangement is designed in such a way that the insured may receive additional money if he or she suffers a loss. It follows that there are cases where the individual may suffer losses that cannot be compensated using the other policy types. When all the liabilities of the other present policies are exhausted, then umbrella insurance amounts come into effect.
So, if you are worried about coverage gaps in your insurance policies, then you may want to consider getting umbrella insurance to ensure that you are fully covered.