Many consumers think their Auto Insurance will fully protect them in the event of a car crash, but this isn’t always the case. Car accidents are becoming increasingly costly, and in many cases, your existing Auto Insurance policy may not be enough. Umbrella Insurance can protect you financially if you are found liable in a car accident. innovante insurance offers Umbrella Insurance in the Pewaukee, Wisconsin area, and would be glad to connect and answer any questions you may have regarding insurance as a whole. Here is what could happen if you don’t have Umbrella Insurance in place after a major car accident.
What is Umbrella Insurance?
First, you will need to understand what Umbrella Insurance is and why it is so important. Umbrella Insurance is designed to protect you financially if you are found liable for an amount higher than your existing insurance covers. Umbrella Insurance can be used in conjunction with Auto Insurance and Home Insurance and other types of liability policies.
When you’re found at fault for an accident, your Auto Insurance will pay out first. For example, say you’re found liable for $500,000 in an accident, but you only have $300,000 in total liability coverage. You’d pay your deductible with your car insurance company, and then they’d pay the full $300,000 you have on your policy. Then, Umbrella Insurance would step in to cover the remaining $200,000. You will usually have to meet minimum underlying coverage requirements for your Auto or Home Insurance to purchase an umbrella policy.
What Happens If I’m In An Accident And Don’t Have Umbrella Insurance?
The cost of car accidents these days is getting increasingly expensive. This is because society as a whole has become increasingly litigious. Car accidents are also happening more often and are getting more serious. This is due to increased rates of distracted driving, more drivers on the road, and a lack of road maintenance in many places. Being found at fault in a multi-car accident can be particularly expensive.
If you are found liable for more than your existing Auto Insurance covers and don’t have umbrella coverage, things can get tricky. Your Auto Insurance will pay up to the limit defined in your policy. Then, you are held liable for the rest of the damages. You may need to take out a loan or sell existing possessions to make the payment. If you don’t pay your full damages, the other party involved could be awarded your possessions by a court of law.
Umbrella Insurance is very important for protecting your financial future. Even careful drivers make mistakes, and a serious accident is something that could happen to anyone. In particular, umbrella coverage is something you should consider if you have a long commute, have a teenage driver in the house, or are otherwise at high risk of an accident. If you’re looking for Umbrella Insurance, contact innovate insurance to learn more. Our licensed professionals will be happy to answer any questions you have.