What is umbrella insurance?

Umbrella insurance refers to the liability insurance policy that is in place to protect all assets and future income of the insured individual or entity in addition to his or her existing primary insurance policies. In effect it covers anything else not covered by your primary insurance policy. It is more or less additional protection in case the insured is being sued for damages to other people’s property, injury caused to others, libel and vandalism, and other charges. An umbrella insurance policy is protection from major lawsuits and claims and, in turn, protection of your assets and future income.

Umbrella insurance is typically best suited for people who own a lot of assets or have highly expensive assets and are highly at risk of being sued.

An umbrella insurance policy is not a necessity for everyone. It mostly depends on the profile of the insured and the personal choice and comfort level of the insured. Some factors to consider would include your overall net worth, your lifestyle, and your comfort level. If you feel that you need additional protection over and above your existing insurance policies, then you can consider getting an umbrella insurance policy for yourself.

It would be best to consult your insurance provider if you are contemplating purchasing an umbrella insurance policy. It is also advisable to assess your requirements before you make any decision about availing of an umbrella insurance policy.