Do You Really Need An Umbrella Policy For Your Car?

Some car owners pass on umbrella insurance because they feel it is an unnecessary expense. Others do so because of misconceptions they have about the coverage. Unfortunately, not knowing the truth about umbrella insurance and failing to understand how it could benefit you could leave you without the coverage needed in the event that there is an accident. To help you make a more informed decision about umbrella insurance, here is what you need to know.  

Doesn't Your Current Policy Provide Enough Protection?

Your current insurance policy does provide considerable protection if you are involved in an accident. However, the coverage has a dollar limit. Once that limit is reached, you are responsible for any damages or injuries that exceed it.  

For instance, if your insurance provides $50,000 worth of coverage, but the damages from the accident are $75,000, you could be left with a $25,000 bill for the remaining damages after your insurance provider pays its limit.  

An umbrella policy would help to fill the gap in coverage. Depending on the amount of your policy, the remaining $25,000 would possibly be covered by the additional coverage. As a result, you could avoid financial distress from attempting to pay the damages.  

Do You Need Umbrella Insurance If You Have No Assets?

If you are at fault for an accident, the injured party could choose to sue you for the total of the damages remaining after the insurance company pays. If you have no money or assets, this might not seem like a big deal. After all, if you have no assets, what is there for the injured party to take, right? 

The reality is the injured party could file a petition with the court asking for a wage garnishment. If granted, your future earnings could be garnished until the damages are paid. He or she could even ask the court to seize the few assets you do own.  

Once the judgment against you is made, the injured party could chase after your finances for years. Although you might not have anything of value now, he or she could still take action years from now when you have accumulated assets and money.  

There are other reasons that you should consider an umbrella policy for your car. Consult with an insurance agent to learn which benefits apply specifically to you and your situation. You can also learn of other ways you can tweak your current coverage to get the most from it. For more information, visit websites like http://www.unitedsecurityagency.com.