Everyone wants more extensive coverage. However, the higher rates that come with such move has been the problem. Well, until now! Have you heard of an umbrella policy? It’s a very useful policy. In this article, we’ll discuss how you can take advantage of it to increase the quality of coverage you enjoy and at the same time, drive down your rates by a huge margin…

Your auto or home insurance policy isn’t really complete without a solid liability coverage. In order to keep things simple, we’ll restrict ourselves to how to do this on your auto insurance policy. The important thing is understanding how it works. Thereafter, you can use the principle for any other policy that has liability coverage included…

Buy an umbrella policy and reduce your bodily injury liability coverage to the barest minimum stipulated by law. The more substantial your assest, the more this recommendation is true in your case. For those who don’t know what bodily injury liability coverage is, it is the part of an auto insurance policy that compensates passengers in your car along with the driver and passengers in the other car if an accident occurs. It protects your assets from lawsuits.

You may be wondering why an umbrella policy is being touted as the smarter option. It’s simple: No matter how much the liability part of your auto policy is, it won’t be enough in very many cases if you are at fault in a serious accident. If your liability coverage can’t take care of their medical bills and damages awarded against you, you could lose all your assets, life savings and even your home. An umbrella policy, on the other hand, will certainly be adequate to cover even the craziest of lawsuits.

Although we are using an auto policy in this example, it is important to point out that the umbrella policy you purchase is valid for liability issues that have nothing to do with your car or driving. Price-wise, you get much more coverage per premium dollar with an umbrella policy…

It could cost a 35 year old man in an area like New York City around $300 extra to raise his bodily injury liability from $25,000/$50,000 to $100,000/$300,000 (The first amount in each pair shows the maximum amount that will be paid out to each injured person in an accident. The second amount shows the maximum that can be paid out per accident). However, with an umbrella policy, he’ll spend less than that to get $1 million worth of coverage. To make it even more interesting, he can easily get $2 million worth of coverage with an umbrella policy for just $375.

If you intend to buy more coverage it will cost you only $50 per million thereafter (This is based on a report by the Insurance Information Institute). Any how you look at it, it certainly helps you get superior coverage for a lot less.

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