The ABCs of Umbrella Insurance: A Comprehensive Guide

Most people have some form of insurance- whether it’s auto, homeowners, or even health insurance. But there’s one type of insurance that often gets overlooked: umbrella insurance. Umbrella insurance is designed to provide an extra layer of protection in the event that you are sued or held liable for damages. It can help to cover costs such as legal fees, medical bills, and even lost wages. And while umbrella insurance is not required by law, it is a wise investment for anyone with significant assets or income.

So, what exactly is umbrella insurance? How does it work? And how much coverage do you need? Ransom & Associates Insurance Agency in Winder, GA offers the following comprehensive guide.

The ABCs of Umbrella Insurance

How Does Umbrella Insurance Work?

Umbrella insurance kicks in when the limits of your other liability policies have been reached. For example, let’s say you have a $500,000 auto insurance policy and you’re involved in an accident that causes $600,000 in damages. Your auto insurance will pay out the first $500,000, and your umbrella policy will cover the remaining $100,000.

How Much Umbrella Insurance Do You Need?

Umbrella insurance is important for anyone with assets to protect. But how much umbrella insurance do you need? The answer depends on several factors, including the value of your assets, the likelihood of being sued, and your tolerance for risk.

Here are a few things to consider when determining how much umbrella insurance to purchase:

  • The value of your assets: Obviously, the more assets you have, the more umbrella insurance you will need. But even if your assets are modest, you could still be sued for a large amount of money. So, it’s important to consider not just the value of your assets but also the likelihood of being sued.
  • The likelihood of being sued: If you are more likely to be sued, you will need more umbrella insurance. Factors that can increase your likelihood of being sued include being a high-profile individual, having a lot of wealth, or being in a high-risk profession.
  • Your tolerance for risk: Finally, you need to consider your own tolerance for risk. If you are the type of person who is comfortable with a little bit of risk, you may not need as much umbrella insurance. But if you are risk-averse, you will want to purchase more coverage.

No one can tell you exactly how much umbrella insurance you need. But by considering these factors, you can make an informed decision about how much coverage to purchase.

Get Umbrella Insurance in Winder, GA

As you can see, umbrella insurance is a wise investment for anyone with significant assets or income. So if you’re looking for an extra layer of protection, Ransom & Associates Insurance Agency can help. We offer umbrella insurance policies. Contact us today to get started.