Imagine being sued and risking your savings—it happens more often than you think. What would you do if you didn’t have the right protection? Many people don’t understand umbrella insurance and miss out on its benefits. A study shows only 57% of renters have insurance compared to 95% of homeowners. This article will bust 9 myths about umbrella insurance to help you stay protected.
1. Umbrella Insurance Is Used only by Rich People
One of the myths most often reported about umbrella insurance is that the policy applies strictly to rich folks or high-net-worth families. Accidents and lawsuits can happen to anyone, and the costs can exceed regular insurance limits. It protects your savings, income, and future earnings, offering peace of mind no matter your financial situation.
2. It’s Only for Personal Liability Claims
Many people think that umbrella insurance protects a person from the claims of personal liability. There is so much more to that. It indeed gives protection for the personal liability part, but still, it includes protection against any other risk, which includes some cases of claims not usually covered by regular policies, such as defamation and false arrest.
3. Umbrella Insurance Covers Everything
Another misconception is that umbrella insurance is a catch-all policy. In reality, while it provides broad coverage, there are limitations and exclusions. For instance, it doesn’t typically cover intentional harm, business-related liabilities, or contractual liabilities. Understanding what’s included and excluded is vital for maximizing the policy’s effectiveness.
4. It Only Kicks In After Your Home and Auto Policies
People believe that umbrella insurance will only pay out after your home and auto insurance limits are exhausted. This is partially true. It acts as an excess policy above your other insurance limits, but some umbrella policies may also provide coverage for certain claims that would not be covered by your primary insurance policies.
5. It is Too Pricey
Cost is a common hindrance for people who consider umbrella insurance. Many assume that it is too expensive. In contrast, umbrella insurance is rather inexpensive, considering the coverage it affords. As a general rule of thumb, a person can secure a million dollars or more of coverage for a few hundred dollars a year. This is often a small change when considering potential huge expenses from liability claims.
6. There is No Need For Umbrella Insurance if You Have Assets to Protect.
Indeed, having possessions subjects you to liability risk. And it doesn’t mean those who hold fewer assets do not need protection, either. Therefore, the least affluent can keep protection against many liability aspects by acquiring a personal umbrella cover.
7. It Only Covers Bodily Injury
Umbrella insurance is often associated by people exclusively with bodily injury claims. However, it also provides coverage for property damage, certain types of personal injury, and more. This means that if someone damages your property or you’re accused of slander, your umbrella policy could come to the rescue. Recognizing the full spectrum of coverage can help individuals appreciate its value.
9. You Need Umbrella Insurance Only If You Have a Family
More likely than not, families are the ones who make a point first to get umbrella insurance. Singles should not underestimate its benefits, however. Whether young professionals, renters, or homeowners, various liabilities come your way. Individuals of any demographic could use a little more coverage from pet-related accidents to injuries during social gatherings.
Finding the Right Umbrella Insurance Through SFM Insurance
Because of all the myths associated with it, one should consult experts who can enlighten one properly on umbrella insurance. SFM Insurance specializes in giving you tailor-made insurance solutions that will lead you through the complexity of umbrella insurance.
SFM Insurance offers experienced agents who take the time to understand your specific situation and assist you in making an informed judgment regarding whether you actually need an umbrella policy. From home and business owners to renters, let’s help you ensure the peace of mind that adequate coverage brings. Contact us today and let our qualified experts guide you in choosing the right policy that fits your lifestyle and risk profile.
