How I Cut My Insurance Costs and Got More Coverage

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I reduced what I was spending on auto and homeowners insurance by getting an umbrella insurance policy. Here’s why this worked for me. 

Having a sufficient amount of insurance coverage is very important to me. Specifically, I want to make sure I always have enough liability coverage. This is the kind of coverage that pays out if someone were to be hurt on my property or in an accident I caused.

Having a lot of liability insurance protects against out-of-pocket losses, as an insurer will only pay up to policy limits. I did not want to worry about having to drain my bank account if a claim was made against me and my insurance wasn’t sufficient.

To make sure my assets were fully protected, I used to have a large liability policy on both my car insurance and my home insurance. But I was able to cut my costs and actually get better protection by making a simple change. Here’s what I did.

Buying this kind of insurance made all the difference

While I previously opted to buy $500,000 in liability protection on my auto insurance and my home insurance, I’ve now reduced the policy limits on both of those policies to $250,000. But, I actually now have $1 million in liability protection in case of either a car accident or an incident at my home. That’s because I opted to buy a different kind of coverage.

The insurance I purchased is called umbrella insurance. It’s a secondary coverage policy that pays out if and only if I have exhausted my primary insurance coverage. And it will pay out for any covered incident, whether at home or on the road.

The premiums for the policy are also very affordable, even for a policy providing $1 million in coverage, since it’s secondary insurance. I’m actually paying less for my umbrella policy than I previously paid in higher premiums when both my home and auto coverage had higher policy limits.

Basically, the way my umbrella insurance works is, the insurer requires me to carry $250,000 in liability protection on my home and auto policies. But if a covered loss happens that results in more than $250,000 of damage to someone else, the umbrella policy pays the uncovered costs.

The umbrella policy thus offers even more protection for my assets since I’d have insurance to pay out up to $1 million if anything went wrong. And it does so more affordably than opting for higher coverage on other plans because it won’t pay out unless there’s a real catastrophe, so the risk is lower for the insurer.

Is buying an umbrella policy a good financial choice for everyone?

Buying an umbrella policy can make sense for anyone who has a lot of assets to protect and wants to make sure they have ample liability insurance in place. Anyone who does not want to worry about being personally sued in case of an accident should look into whether buying an umbrella policy could be cheaper than having high policy limits on other kinds of insurance.

It’s easy to get umbrella insurance quotes in a matter of minutes, so check today to see if umbrella insurance could provide desired protection at an affordable price.

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