subject: Covering Gaps With Umbrella Insurance Policies [print this page] Believe it or not, your insurance policy is not bulletproof. Often, you need to buy additional insurance coverage for any gaps that appear, whether it is a new purchase, events you will partake in, or changes to your lifestyle. Here are some great tips on how to succeed in choosing the best umbrella coverage for you.
Umbrella insurance policies are designed for broad coverage that will supplement your current liability coverage. Most standard homeowner's policies will be not sufficient for a special event, and often they are capped at a very small fund. This means that if some disaster were to occur to your friends at your party, you'd be possibly going broke fixing their back. Thus, many people who plan well for their future will opt for umbrella coverage.
For example, most auto insurance policies have restrictions on coverage for utilizing vehicles outside your personal property (except for rental cars, but that is a different story). You can't rent a boat, or a motorcycle and be covered for liability benefits at all. Some people wrongly assume even vacation trips on these other vehicles will be covered in their primary policy, only to find out the hard way. When in doubt, check with your agent; further, we are not professionals nor do we give professional advice. Everyone's situation is different and everything we write here may be accurate for your situation.
Even if you have modest wealth, you can still benefit others with your umbrella coverage. If your good friend has too many beers with you one night, and while driving home crashes, injuring himself and another person, he'll be eternally grateful that you have an umbrella plan.
Here is a list of common gaps within primary insurance plans. Please check with your agent to see if this applies to your situation. If you are renting cars outside of the United States or you are racing sailboats around the world, you are not protected. If you are signing any contracts, which have liability clauses, your primary liability policy is excluded. This sometimes even applies to wedding receptions and other events, where you would think someone else is liable. In conclusion, don't rush to conclusions and assess your lifestyle for risks.
When you are creating your umbrella policy, it is helpful to go through a checklist of what items in your lifestyle you may need coverage for. This is especially important if you are going abroad for extended amounts of time, as well as doing special activities like sailboat racing. Some people like riskier activities than others, and you should make your assets are covered!
Often, you can start buying an umbrella policy right away with your current provider. Many policies will fit better when you stick with the same insurance provider. Of course, this is an ideal situation, since you'll want to compare the umbrella policies of other companies as well. Just make sure to check in with your primary policy insurance agent before completing the policy.
by: Casey Trillbar
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