Liability is a big buzzword these days, and there are very few other words that make people cringe and fearful at the same time. As the world seemingly gets more and more litigious, liability takes on a whole new meaning. These days, there is no predicting what kind of lawsuits will be filed and the amount of money a judge will deem appropriate as a reward for that lawsuit. Because of this, umbrella insurance has become much more common than it has been in the past.
There was a time when umbrella insurance policies was only a luxury of the well-to-do, but that is not quite the story these days. In fact, it has become a norm for organizations, corporations and other associations to take out their own individual umbrella insurance policies.
In short, an umbrella insurance policy is just like a normal insurance policy- as in it protects people from risk- but, it has a much higher liability payout limit. Most regular insurance policies will only agree to cover a person’s liability- also known as risk- up to a certain extent, but an umbrella insurance policy lifts the ceiling on that extent. The other defining characteristic of an umbrella insurance policy is that it will cover all types of insurance, from car insurance, to home insurance and beyond. In the end, the umbrella insurance policy will be way more expensive than a normal insurance policy, but- if a person ever finds themselves in a costly litigious situation- it could end up saving the person a boatload of money. Some studies done by various insurance companies and professionals have concluded that an umbrella insurance policy can end up saving a person anywhere from $1 million to $5 million, if that person does indeed have to go to court for a liability case.
Umbrella insurance is essentially a hulk-like version of a normal liability section of an insurance policy. In the case of homeowner’s insurance, the liability portion covers things like when a person gets injured at your home at brings you to court due to a perceived negligence on the homeowner’s part. Liability insurance will cover things like medical bills, rehab therapy, lost wages because of the injury and tons of other causes and situations. On top of all those potentially very expensive costs, the liability portion of the normal insurance policy- and the umbrella insurance policy- will also have to cover legal expenses related directly to the liability case at hand.
But, once all the expenses are combined together (medical and legal fees) most normal liability portions of insurance policies do not cover enough money to pay for it all. Thus, many normal insurance policy holders are left footing the rest of the bill, which can be extremely costly in the end. Umbrella insurance will protect a person from all of that hassle. The liability portion of an umbrella insurance policy is often more than enough to cover all of the various medical and legal costs of the trial. So, when considering all of that, umbrella insurance seems like a much more reasonable cost than what would happen if a person was left with a hefty legal bill. Sometimes, if a person lacks that money to pay what is left over, their property will be seized. Thus, it is often to err on the side of umbrella insurance, rather than gamble with a normal insurance policy. And that is why it makes sense for any organization, corporation or any other association to have some kind of umbrella policy.
This article was written by Danny Katsopolus for the team at http://www.leadsure.com.