One of the most misunderstood types of insurance coverage is known as umbrella insurance. It is a type of supplementary liability coverage that works alongside a traditional policy, like homeowners, automobile, or boat insurance. It can be an invaluable resource in case of catastrophic incidents and should be a part of everyone's risk management portfolio. Below are some of the key benefits of having an umbrella policy.

3 Reasons to Purchase an Umbrella Policy

1. It Protects At-Risk Assets

Umbrella insurance does not come into play until the limits of your underlying policy are exhausted. For instance, if your auto insurance policy covers medical costs for an accident you've caused up to $300,000, you would be on the hook for any expenses beyond that amount. An umbrella policy of $1 million covers all costs beyond $300,00 up to the $1 million limit. It protects you from financial ruin and keeps you from being sued.

2. It Covers Hazards Other Policies Don't

Aside from covering costs beyond the limit of your other policies, an umbrella policy also covers hazards that other policies typically exclude. For example, it covers the cost of defending you against charges of slander, libel, false arrest, malicious prosecution, and mental anguish. It also covers accidents that occur on your rental properties, such as a passerby being bitten by a tenant's dog.

3. It Provides Peace of Mind

Best of all, it provides peace of mind that you won't face catastrophic financial losses due to a single, unfortunate event. It's an additional layer of protection against uncertainty that protects you, your family, and the assets you've worked so hard to earn and accumulate.

For expert assistance designing an umbrella policy that meets your needs and fits your budget, contact Mountcastle Insurance in Winston-Salem, NC. They have served businesses and individuals throughout the Triad area since 1890. In addition to umbrella insurance, they also specialize in auto, home, business, and health insurance. Visit their website to learn more about the company or call (336) 777-8500 to speak with an agent and request an umbrella policy quote.