Umbrella insurance is surrounded by myths and misunderstandings. What it is and why it is valuable is not universally understood. At Heimgartner Insurance Inc in Sioux City, IA, we try to make sure that our customers have the information they need to make educated decisions about the coverage they choose.

To understand the benefits of umbrella insurance, you need to know what it is and what it does:

Think of your umbrella insurance as an umbrella. Your assets are the person using the umbrella and the rain is a danger to your assets. The umbrella keeps the rain away from the person and umbrella insurance protects your assets from any danger to them. Another analogy would be that the umbrella covers all of the policies that you carry are protected and extended with the umbrella insurance coverage.

Umbrella insurance is an additional layer of liability protection that supplements the liability coverage that you already have. Umbrella insurance is not a stand-alone policy, it can only be purchased if you already have a policy with liability coverage. You don’t need to get it from the same company, but you do need to have a policy. Liability coverage is on many different policies, including home, auto, and commercial.

How it works is this, if you are sued, your primary insurance will cover you up to the limit of your policy. If you don’t have umbrella insurance, you are responsible for paying any judgment beyond the limit of your policy. If you have umbrella coverage, it will kick in when you reach the limit of your primary policy up to the limit of the umbrella policy. Legal expenses are also covered.