Umbrella insurance is an insurance policy which protects the policy holder against the damages and liabilities. This insurance policy secures the policy holders from all the existing insurance policies such as home insurance, property insurance, and liability insurance, etc. The home, auto, property and liability insurance pays for a certain amount of losses. But, if the loss amount exceeds than the stated insurance coverage, the insurance company pays only for the certain limit. Whenever your existing policy is not able to pay the full loss amount then the umbrella insurance can provide full coverage for the loss.
The main purpose of umbrella insurance is, it covers the excess losses when the respective insurance does not cover full loss of property or liability. Umbrella insurance does not just cover you from financial damages but it can save you from the biggest financial losses that cannot be covered by your respective insurance policy. For example: if you get excess loss for your home and your home insurance cannot cover entire loss, as the loss amount exceeds than the stated insurance amount. In these cases, if you have umbrella insurance, then your umbrella insurance covers the remaining loss percentage. If your home insurance cover 60% of loss, then umbrella insurance covers the remaining 40% loss. It means that the umbrella insurance does not cover the direct loss, but it can cover the losses whenever your current insurance policy is not able to cover.
Umbrella insurance provides benefits for individuals and businesses. It can cover the excess of property, auto, liability and lawsuits losses.