Auto insurance is a must for everyone. It is not only a legal obligation by the States but soon becoming a necessity. It is primarily an agreement between the auto owner and the insurance company wherein against a certain amount paid as premium; the auto owner enjoys protection from financial losses caused due to an accident or any other mishap.
Additional Coverage
While you do enjoy the basic cover that your auto insurance policy offers, the need for a liability shield over and above this typical coverage may be felt. Umbrella Liability Auto Insurance or ULI as it is commonly referred to does just that. It protects you in stormy financial weather, against the appalling losses that can befall upon you in case you are taken to court.
ULI is therefore also referred to as excess coverage. Like an ‘umbrella’ it provides an extra layer of protection to your already existing insurance policy, offering you complete peace of mind. Although umbrella liability insurance can be taken as an independent policy, basic insurance coverage is a must.
Why Umbrella Protection?
Your basic insurance provides adequate coverage under any normal circumstances but not in case of a serious accident when a $5 million or $10 million court judgment is slapped against you. If you do not have umbrella insurance, anything above the amount of your auto insurance cover will have to be paid by you.
Simply explained, you may have auto insurance cover with a liability cap of $200,000 for an accident and another $2 million as umbrella insurance. If you are found guilty for a serious accident and the court holds you liable to pay $800,000 in damages, in such conditions, the first $200,000 will be paid up from your auto insurance cover while the balance $600,000 will be covered from your umbrella policy.
If there were no ULI, this amount would come from your pocket! Coverage Limits Umbrella liability insurance typically provides broad coverage. If something is not expressly excluded from coverage, it is considered as covered. More commonly, ULI provides you with protection against any claim for injuries or damage inflicted by you and you are legally responsible for the same; additional cover beyond your basic auto insurance cover; and costs incurred in legal defence, including fees of the lawyers and other court expenses, among others.
Exclusions may differ from company to company and policy to policy. Some common items that are not included in the coverage are: any intentional damage; any responsibility that you agree to as part of the contract or agreement; responsibility related to aircraft, non conventional watercraft and other recreational vehicles; and any liability cropping up due to an armed conflict or rebellion, to name a few.
Buying Umbrella Liability Insurance Coverage limit can be anywhere between $1 million and $10 million. As the limit increases so will your premium. Therefore, assess your insurance needs and also ascertain your payment capability. You surely would want to protection yourself adequately without overdoing it.
You can buy umbrella liability policies from any insurance company. If you decide to purchase it from your current auto insurance company, you may even be entitled to a multi-policy discount. Look around before you buy so as to ensure that you are getting the right cover that’s suited to your needs for the best price.