You might know how umbrella insurance works with what it can do for you. What you may not know, however, is the process for getting umbrella insurance.
It takes nothing to get umbrella insurance and start enjoying the coverage. However, you must also consider factors to ensure it is right for you. Keep reading to get more information on the process when getting umbrella insurance.
When Do You Need It?
Personal umbrella insurance is required, especially for rich homes. A lawsuit can target a wealthy individual or family. In addition, the following circumstances can increase your risk of going to court, prompting you to get umbrella insurance:
- A nonprofit board employs you.
- You have a pool, pond, or trampoline.
- You keep large animals like horses, dogs, or other pets.
- Overseeing a family trust.
- Your home is the location of large gatherings.
- You employ household staff.
- You have a well-known public image.
How Much Coverage Is Necessary?
When deciding on the level of coverage, there are a few things to consider.
- Asset value: If you frequently stand to lose much money in a lawsuit, your insurance should cover your net worth at least.
- Possibilities of future income loss: Even if your current income is limited, consider your potential future revenue. For example, if you’re a medical student, you should consider your potential future salary.
A protracted legal struggle can be stressful and possibly damage someone’s reputation. If you purchase this service, you can preserve everything you’ve worked hard to achieve, but the stress won’t disappear.
Getting Coverage
This insurance is usually provided by the same insurance firms that provide boat, home, and auto insurance. The base policy must have a specific amount of liability coverage before you may purchase umbrella insurance. For example, you might need:
- Homeowners insurance of $300,000.
- Automobile insurance: $300,000 per occurrence in per-occurrence bodily injury coverage and at least $100,000 in property damage coverage
- Watercraft liability insurance of $300,000
