November 14, 2010

3 Benefits Of Purchasing Umbrella Auto Insurance Coverage

Umbrella insurance is an extension of your auto insurance coverage. Most states mandate that drivers purchase auto insurance but umbrella insurance is optional. The umbrella coverage may be one of the most important components of your auto insurance coverage. Lawsuits and catastrophic accidents unfortunately do occur and they can ruin the finances of a family. Umbrella coverage gives you the additional coverage that you may be grateful for if you are ever involved in a lawsuit.

The primary benefit of umbrella insurance is that it protects your assets. For example, if you hit another car during a bad storm and cause not only property damage but you injure the other driver or passengers you could be liable for a large sum of money. In addition to paying for medical expenses and lost wages you could be sued. Lawyers commonly sue for injuries in accidents and they may be able to get their clients millions of dollars in damages. If you don't have an umbrella policy then you would be liable to pay for the amount of the settlement. For most people this could wipe out their savings and mean losing their home and causing them financial ruin. The good news is that umbrella insurance covers damages that must be paid.

Another benefit to having an umbrella policy is the cost of legal fees. Liability insurance on auto insurance coverage is meant to protect the insured person when they are sued and found to be negligent. But the limit on auto insurance coverage might be as low as $50,000 and that amount could easily be used up even if the driver is not sued. When there is a lawsuit the costs begin to skyrocket. The lawyers' fees alone can exceed the limit on the policy. A lawyer's fees and other legal costs are covered under an umbrella policy.

A final reason to get an umbrella policy is that it is an affordable way to gain peace of mind. The additional coverage costs much less than the original amount of liability protection. Adding on additional coverage may cost just pennies per day. Knowing that even if you are sued, you have the resources in place to protect your family and your assets is invaluable. No one will be able to take your hard earned savings or seize your home. Anyone could be put into the position of having to pay for someone's medical expenses or being sued. Even a careful driver can be caught in bad weather, have equipment failure or unwittingly cause a serious accident. If you buy the additional coverage that an umbrella policy provides then that is one less financial worry.