The Myth Of Full Coverage: Why You Need Umbrella Insurance

​Many vehicle owners believe that having full coverage auto insurance means they are completely protected in any situation. However, the concept of "full coverage" can be misleading, as standard auto insurance policies have limitations and exclusions that could leave significant gaps in coverage. This blog explains why umbrella insurance is a critical addition to your insurance portfolio, ensuring you are truly protected against potential financial disasters.

Understanding Full Coverage Auto Insurance
Full coverage auto insurance typically includes liability, collision, and comprehensive insurance. This combination covers damage to your vehicle, as well as liability for bodily injury and property damage to others if you are at fault in an accident. However, "full coverage" does not cover every conceivable risk:

• Liability Limits:
  Standard policies have maximum limits that may not be enough to cover all damages in a severe accident, especially if multiple vehicles or parties are involved.
  
  
• Exclusions:
  Common exclusions include damage from natural disasters, vandalism, and accidents involving uninsured or underinsured drivers.

What is Umbrella Insurance?
Umbrella insurance is an extra layer of liability coverage that kicks in when your basic liability limits on your auto, homeowners, or other insurance policies have been reached. Umbrella insurance can cover:

• Significant legal fees if you are sued.
• Other parties’ medical bills and lost wages that exceed your standard policy limits.
• Damage claims that are not covered under typical liability policies.

The Gaps That Umbrella Insurance Fills

1. High-cost Liabilities:
   In catastrophic accidents where damages exceed the typical auto or homeowner policy limits, umbrella insurance can prevent financial ruin. For instance, if you are liable for a multi-car accident, the total cost could easily surpass a standard policy limit of $300,000 or $500,000. Umbrella insurance can cover additional costs, often up to $1 million or more.
   
   
2. Legal Fees:
   Legal defense, even in cases where you are not found liable, can be astronomically expensive. Umbrella insurance helps cover these costs, thus protecting your assets and savings.
   
   
3. Personal Liability Situations:
   Umbrella insurance covers scenarios that might not be directly related to your vehicle but involve significant personal liability, such as accidents occurring on your property, slander, libel, wrongful eviction, and more.

Why You Need Umbrella Insurance

• Asset Protection:
  Without sufficient coverage, your assets, including your home, savings, and future earnings, could be at risk in the event of a lawsuit following a serious accident.
  
  
• Peace of Mind:
  Knowing you have coverage above and beyond the limits of your standard policies can give you peace of mind, allowing you to enjoy daily activities without worrying about potential financial disasters.
  
  
• Affordability:
  Compared to the amount of coverage it provides, umbrella insurance is relatively inexpensive. It is generally considered a cost-effective way to increase your overall liability protection.

How to Get Umbrella Insurance
To purchase umbrella insurance, you typically need to have underlying policy limits (like auto or homeowners) at a certain minimum, as specified by the insurer. You can buy umbrella insurance through the same insurance company providing your auto or homeowners insurance, which can sometimes offer a bundled discount.

Conclusion
The notion of "full coverage" in auto insurance is a myth that could leave you exposed to significant financial risk. Umbrella insurance is an essential policy that provides an additional safety net, extending your liability protection beyond the usual limits of your existing policies. By investing in umbrella insurance, you ensure that you and your assets are genuinely safeguarded against the high costs that can arise from serious accidents and lawsuits.

At Best Insurance Group, LLC, we put our clients first by offering them policies that they can afford. Having insurance is a necessity nowadays, and we're here to help you out. Learn more about our products and services by calling our agency at (970) 674-5000. You can also request a free quote by CLICKING HERE. 

Disclaimer: The information presented in this blog is intended for informational purposes only and should not be considered as professional advice. It is crucial to consult with a qualified insurance agent or professional for personalized advice tailored to your specific circumstances. They can provide expert guidance and help you make informed decisions regarding your insurance needs.