An Umbrella Insurance policy provides extra financial protection beyond what your Home and Auto Insurance policies can offer. Binford Insurance offers comprehensive umbrella coverage in Indianapolis, Indiana. However, for your Umbrella Insurance policy to work, you’ll need to maintain underlying coverages. Here is what you need to know about underlying coverage requirements and how they work with your Umbrella Insurance policy.
What is an Umbrella Insurance Policy and Why Do I Need One?
An Umbrella Insurance policy is designed to work with your existing insurance policies, such as Home Insurance or Car Insurance. It essentially provides you with extra coverage if you are held liable for more money than your current insurance can offer. You never know when a catastrophic event might happen, and Umbrella Insurance provides extra protection to give you peace of mind. This is particularly important in today’s world, where lawsuits are incredibly common and can happen at any time.
For example, if you are found at fault in a multi-car accident, your Liability Insurance may not provide enough coverage – that’s where the umbrella coverage would step in. It can also provide coverage for accidents that happen on your property. Umbrella Insurance can also cover additional liability charges that wouldn’t be covered under other insurance policies, such as cases of slander or libel (Home Insurance policy must have a coverage called Personal Injury in slander or libel claims). When something like this happens, you’ll pay your original deductible, and then your Home or Auto Insurance provider will pay up to their coverage limits. Lastly, the Umbrella Insurance company will step in to pay the remaining balance.
What are Underlying Coverage Requirements?
To maintain an Umbrella Insurance policy, you’ll need to adhere to underlying coverage requirements. You will need to have some form of Personal Liability coverage, which is usually Auto and Home insurance. The umbrella insurer will require you have a certain amount of coverage in place on these policies at around $250,000 for Auto Liability and $300,000 for Home Liability. If your current Auto and Home Insurance does not have these liability limits or higher, you will not qualify for an Umbrella Insurance policy with most insurance carriers.
What Happens If I Don’t Maintain My Underlying Coverages?
You will need to meet your underlying coverage requirements for your Umbrella Insurance to work. If you file an Umbrella Insurance claim and your insurer finds out you do not have the appropriate underlying coverage limits in place, they could deny the claim and void your policy. If you need to change your underlying coverage, you will need to notify your Umbrella Insurance provider right away to prevent your policy from becoming void.
Having an Umbrella Insurance policy is one of the most effective ways to protect yourself against a lawsuit. However, it’s incredibly important to maintain your underlying coverage to avoid any problems. Binford Insurance provides Umbrella Insurance coverage in Indianapolis, Indiana, to give you financial peace of mind.
To learn more about Umbrella Insurance, contact Binford Insurance. Our licensed professionals will be happy to answer any questions you have.