When you purchase an insurance policy for something, whether that is your home, your car, or some other valuable possession, it can be easy to assume that that insurance policy will provide you with all of the coverage you need. After all, the insurance policy is designed to pick up any costs after something goes wrong.
However, it is important to consider the limits of your insurance coverage. While somewhat uncommon, sometimes a catastrophic event can take place, involving your insured possession, where so much damage occurs that the cost of repair or replacement ends up exceeding your insurance policy’s limits. In cases like these, you will end up having to cover anything over the limit out of pocket. That is, unless you have umbrella coverage.
What Is Umbrella Coverage?
Umbrella coverage is a type of insurance coverage that is designed to cover claims that exceed your regular insurance policy limits. It can be purchased for just about anything you can usually insure and can offer a financial safety net of sorts.
How Much Does Umbrella Coverage Cost?
The cost of umbrella coverage can vary widely. Insurance providers typically look at a wide range of factors when deciding how much to charge you. Some of these factors are:
- Your location
- Your claim history
- The value of the insured possession
When claims exceed your regular insurance limits, it can result in immense financial damages. Luckily, umbrella coverage can provide you with the higher limits you need.