Umbrella insurance is a form of liability insurance that will supplement your basic liability policies, such as your auto, home or renters insurance. An umbrella liability policy covers a much higher limit and goes above and beyond claims directly relating to your home and auto.
The main purpose of your umbrella policy is to protect your assets from an unforeseen event, such as a tragic accident in which you are held responsible for damages or bodily injuries. If another party files a lawsuit against you, your umbrella coverage will pay for the damages you're legally responsible for up to the policy limit.
There is no state requirement regarding Homeowners insurance in the state of Pennsylvania and while not a requirement by the state, most often a lender will require it. Even if you own your home outright, Homeowners insurance is a good idea. While most people will never have to suffer through the loss of their entire home and possessions, it can happen. Tornadoes, fires, mudslides and floods are just a few of the things that can destroy a home. If something were to happen, insurance allows homeowners to rebuild without draining their life savings.
Coverage for these things varies depending on your policy. Typically, you can create a comprehensive policy with your insurance agent that provides adequate coverage in the areas you need it. Homeowners insurance ensures that you and your family will be safe from liability issues and property damage. Included in liability issues, typically, is injury or property damage that you or a member of your household causes to another person. Some policies will also include damage caused to other people by household pets. Your home is covered for damage caused by most disasters; however, floods, earthquakes, and normal wear and tear are excluded from homeowners plans. Supplemental policies can be purchased to cover floods and earthquakes.
Your car, house, investments and retirement accounts, as well as your normal checking and savings accounts and even future income, are all considered assets. It is important to know that if you are sued for a lot of money and do not have enough liability insurance or an umbrella policy to cover those costs, all of your assets are exposed. People typically choose to buy an umbrella policy because they want to prevent the possibility of financial ruin due to one misstep or unforeseen accident. Umbrella insurance can provide the protection to prevent such an outcome.