Umbrella Insurance: How It Works & What it Covers

Purchasing insurance can help mitigate the financial costs and worry of the many what-ifs and accidents that may come your way. Just like there is likely an app for “that,” there is likely an insurance policy for “that” too.

Whether it’s homeowners, renters, auto, health, business, etc., is your policy’s coverage enough for your needs? This is where an umbrella insurance policy can come into play.

Umbrella insurance is generally purchased as a supplement to your existing insurance policies, as it extends your coverage for situations where you may need a bit more financial protection, with a higher monetary limit.

How Umbrella Insurance Works in Florida

While you pay a monthly premium and have a deductible to pay when you file an insurance claim, most insurance policies have a cap on how much the insurance company will pay out (as outlined in your policy) in the event of a claim.

Umbrella insurance works as a supplement to your primary insurance policy, covering the difference between what your primary insurer pays out and what you may still owe, including any additional legal costs resulting from a potential lawsuit.

What Can Umbrella Insurance Typically Cover?

While umbrella insurance does extend your financial protection for many common types of claims, it can also cover a broad range of situations, including:

  • Libel and slander
  • False arrest
  • Malicious prosecution
  • Personal mental harm or anguish
  • Legal defense costs for covered losses

Should You Get Umbrella Insurance?

If you have insurance in Florida, should you even bother getting umbrella insurance? It depends on your finances, property values, and overall net worth. Having umbrella insurance is an added means of protecting your wallet.

Another question to ask yourself is if you are at risk of being sued, which can happen to nearly anyone. Having umbrella insurance may provide you with extra peace of mind for the “what ifs” and accidents that may occur.

Whether you have a substantial net worth or may not feel you have enough financial coverage from your existing insurance policies, umbrella insurance may be a worthwhile investment for you.

If you are unsure or considering which insurance policies are best for your lifestyle and budget, contact GWK Insurance today to help you find the best solution for you.