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Umbrella Insurance: What it is and what it means for you?

When it comes to protecting our assets and health, we insure our home, car, bike, mobile, life, health and so on. In fact, some celebrities even insure their most precious body part; David Beckham had his legs insured for $70 million (almost Rs 455 crore) at the height of his success. Usually, different assets are insured with separate policies. Have you ever wondered if there was a way to protect all your assets in one go? The answer to this question is an umbrella insurance. Let’s find out more about how it can help you:

The definition

Umbrella insurance, also known as extra liability insurance, helps you protect your future and your precious assets. This is designed to also protect you from any lawsuits or huge claims. Thus, unlike other insurance that pay only for the asset secured, this insurance also pays for the claims that could be applicable.

An example

Say you were responsible for a car accident that resulted in a grievous injury for the other driver. The medical expenses of the other driver are Rs 3 lakh and he sues you for them. Your car insurance might only be able to partly cover the amount. Or it might only cover the damage to the car and not to the drivers. This is where an umbrella insurance can be handy. It will pay any amount pertaining to the claim that isn’t covered by the other insurances. To sum it up, umbrella insurance could protect you from potential lawsuits and other such claims not covered by other insurances.

Some more benefits

Umbrella insurance is beneficial to anyone who possesses multiple assets. To list down some:

  • Other policies do not cover claims like false arrest, defamation, slander, and liability protection on the rental units that you own.
  • An umbrella insurance policy covers you against the plethora of dangers or unforeseen circumstances that no other policy does.
  • Your insurance provider will offer an umbrella insurance policy at a lower rate if you already have a policy with them.
  • You get broader coverage on your primary insurance policies like car and home insurance.
  • Umbrella insurance has a feature called the drop-down feature that fills the coverage gaps of other insurance policies that you may have.

What exactly does it cover?

  • Bodily injuries liability
  • Property Damage liability
  • Protects the landlords against any potential liabilities
  • Protection against prosecution caused by any malicious intent
  • Lawsuits and legal processes
  • Any other damages to your property or assets

Note that it doesn’t cover any liabilities caused due to war, any damage or loss due to exposure to asbestos or if the policy holder is obliged to clauses such as the worker’s compensation law.

How do you claim the insurance?

The process of claiming umbrella insurance is fast and quite hassle free. All you need to do is submit all the necessary documents that are filled/stamped and are valid.

Bottom Line

Umbrella insurance could be quite helpful when it comes to your peace of mind against any future expenses. However, you must research before you pick a policy to ensure maximum peace. Ensure you know what exactly your needs are and why you need an umbrella insurance before buying one.