subject: Why Should You Consider an Umbrella Insurance Policy? [print this page] Why Should You Consider an Umbrella Insurance Policy?
Any type of insurance you need can be found through a Baltimore insurance agency. There are many comprehensive lists found on the Internet and comparison shopping is always wise; premiums for the same exact coverage do vary from one underwriter to another. Most, if not all, insurance companies base their individual rates on your personal credit score. Those with a low score are deemed more of a risk than those who consistently make their payments on time and are not over-extended. You may have to opt for lower coverage on your various policies in order to afford monthly premiums; having an umbrella policy is a viable option to insure you are totally covered in the event someone sues you for an amount that exceeds your policy coverage.
Umbrella insurance is a separate policy over and above your homeowner's or auto policies and does not replace any other insurance. It is designed to be additional coverage that pays covered claims that your regular Baltimore insurance policies do not. For instance, if you or one of your covered dependents is in an auto accident and the other party sues you for more than your auto policy limits provide then the umbrella policy will pay the difference. Let us say a court awards damages of $1,000,000 to an injured party and your auto insurance has a $100,000 maximum payout; the umbrella would pay out $900,000 so that your personal assets are not touched. Likewise, if someone is bitten by your dog on your property and sues you for pain and suffering plus medical costs, your homeowner's policy may not provide enough monetary coverage to meet this court awarded obligation.
Umbrella insurance policies are not just for the affluent. No matter what your income level is, for as little as $100 per year for up to $1 million in coverage (depending on your credit score, assets and the terms of your other insurance policies) you can have the peace of mind that comes from the knowledge that you will be covered even if you have to select lesser liability dollar amounts on your other policies. Most umbrella policies do require that you maintain certain minimum coverages, but the differences in premium between that and the maximum may make purchasing umbrella insurance a wise choice.
This type of insurance is also beneficial for business owners. Incorporating will separate your personal finances from your business, but in the event your business is sued for an amount greater than your general liability insurance, without a commercial umbrella policy you may have no choice but to close your business or lose a significant amount of monthly income to make payments on a claim. It does not matter if you are a single entity or a business owner, having an umbrella policy can fill in the cracks where your other Baltimore insurance policies leave you open to financial disaster.
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