So you’ve purchased a primary insurance policy to avoid financial situations that could cause devastating injuries and property damage to others, but is that primary insurance enough to thoroughly cover you and your assets? Fortunately, having an umbrella policy can provide additional coverage if you face costs due to a liability claim.
So What is Umbrella Coverage Exactly?
Personal umbrella coverage provides additional levels of liability protection. If the liability limits on your home, auto, or other insurance policy are exhausted, your umbrella insurance policy steps in and provides you with additional protection.
If you’re ever found responsible or negligent for a personal injury or for damage of someone’s property, then your umbrella policy can help pay for these damages.
Umbrella insurance does not provide coverage for any physical property damage such as damage to your home or vehicle. Most of the time, those types of situations are covered under your policy in your homeowners or vehicle insurance.
Here are a few common cases that fall under umbrella coverage.
If your dog was to get into a physical altercation either by biting another dog or person, then you could be at fault for the medical expenses of the other party. If the medical expenses exceed the normal limits of your homeowners or renters policy, your umbrella insurance policy would be used to cover the additional costs.
Unfortunately, the risk of motor vehicle crashes is higher among 16 to 19-year-olds than among any other age group. In fact, teen drivers ages 16 to 19 are nearly three times more likely than drivers aged 20 and older to be in a fatal crash. This creates a high risk and high liability. If you currently have a teenager who is driving, you should definitely consider an umbrella policy which can come in handy if they are at fault in a serious accident.
Intoxicated Party Guest
Did you know that you could be liable for a person who gets into an accident after leaving a party at your home if they had too much to drink? Depending on what state
you live in, a lawyer could claim that you over-served the guest alcohol, didn’t offer for them to stay the night, or didn’t take their keys so that person couldn’t drive. One of the unexpected and most expensive liability claims people may find themselves in are indirect liability claims. Umbrella coverage can help protect against these claims when homeowners’ insurance likely wouldn’t and/or the limits of liability are not high enough.
Umbrella coverage can also be used to pay the fees associated with defending yourself in court. If someone ends up suing you and you are found at fault, your umbrella insurance policy can step in to pay for the associated liability expenses that you owe above and beyond your home or auto liability limits.
In summary, think of umbrella insurance as a type of excess liability coverage for your savings and other assets. In most cases, higher limits of protection costs less than $1 dollar per day and covers not only you, but your spouse and all family members living in your household. Personal umbrella policies start at $1,000,000 and higher limits may be available.