Umbrella Insurance (aka Excess Liability)

Umbrella Insurance, or Excess Liability, is designed for cases in which an accident or similar claim exceeds the coverage, and offers additional funds to come in to cover any amount above the normal value. Although umbrella insurance policies use to be costly, something that only the wealthy could afford to buy, it might be even more costly not to get umbrella insurance.

After all, once you consider the cost of an accident, there may be the high costs of medical treatment from a hospital, the lost wages from not being able to be at the job, as well as the possible mental therapy. This is not to mention all the legal ramifications that results from dragging out the eventual court case. Sadly, liability insurance can only cover so much, and if costs of it all exceed the coverage, an umbrella insurance policy is really the only cure.

The issue with umbrella insurance is that there is no standard, so the policy varies from company to company. The bad news is that insurers can essentially come up with their own figures when it comes to premium quotes, which could be quite expensive. The good news is that the price of umbrella insurance is getting lower, and many insurance companies will offer excellent deals on it if their client tacks it on with their regular insurance program.

Like any good insurance program, the old phrase "shop around" applies to umbrella insurance. Definitely don't be sold on the very first one. Each umbrella insurance program comes with certain components that must be looked over before any deal can be made. First, make certain that the definitions of what it can cover are clearly defined. Second, make certain that any accidents that it does not cover are also defined clearly. Umbrella insurance is the one thing that you need to read the fine print on.