personal umbrella insurance
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A Personal Umbrella policy is one of the lesser known types of insurance that can protect you, members of your family, and your personal assets. The coverage is wide-ranging compared to other types of insurance policies and tends to be cheaper given the amount of coverage you’re typically provided. The reason for this is because an Umbrella policy only kicks in if one of your other policies (Auto, Homeowner, Watercraft, etc) is maxed out as a result of a claim. It isn’t often that a claim is so severe that it results in a max payout on an insurance policy. If such a claim did happen and litigation was brought against you to cover your liability, then your personal assets including your home, property, and savings could be at risk. But having Umbrella insurance in place provides the peace of mind that you have the coverage necessary to protect you in the event of a catastrophic claim. The following addresses some of the more common questions consumers have regarding Personal Umbrella insurance.
Personal umbrella policies provide three types of coverage:
Excess liability coverage provides liability coverage beyond what your other insurance policies can provide. Say, for example, that you cause a 10 car pileup. Each driver could sue you for being liable for the accident. Such a claim would quickly exhaust the limits available on your auto policy. In such an instance, without an Umbrella policy, those lawsuits could put your personal assets at risk. But with an Umbrella policy, you’ll have additional liability protection once your Auto liability coverage is maxed out.
Umbrella policies also pay for defense costs. Take the example of the 10 car pileup. The lawyer fees and court expenses can add up quickly in such a scenario. An Umbrella policy will cover those costs rather than requiring you to pay them out-of-pocket. And then, if you’re found at fault, whatever Umbrella coverage remains after paying the defense fees can be applied to whatever liability expenses that are owed.
Expanded Homeowner insurance is the third, and least well-known, benefit of an Umbrella policy. Assume your dog escapes and bites someone passing by. Or a guest is hurt on your trampoline or hammock. Typical Homeowner insurance policies have specific exclusions for these types of claims. But an Umbrella policy could protect you even when your Homeowner policy wouldn’t provide coverage.
There are, however, limitations to what an Umbrella policy will cover. Typically, any type of physical property damage is excluded. So damage to your own home or vehicle, even if your limits on your Homeowner or Auto policy are maxed out due to a claim, wouldn’t be covered by Umbrella insurance. Likewise, Umbrella insurance wouldn’t cover your personal property if someone steals everything in your house or vandalizes your boat. The individual policies for these properties would be responsible for handling these types of claims.
The best way to determine the benefits of an Umbrella policy is to ask a licensed agent in our office. We can assist you with assessing your personal insurance needs and provide you with some quotes from several of the top insurance companies.
Who needs a personal umbrella insurance policy?
Anyone who wants additional liability coverage for their home, auto, boat or rental insurance property should get an umbrella insurance policy. Umbrella insurance gives you above and beyond insurance protection.
What are the limits available for umbrella insurance?
Typically umbrella insurance policies are available in $1 million – $3 million. While uncommon, higher coverages can be found.
What situation would an umbrella policy come in handy?
There are countless situations where an umbrella insurance would come in handy. Here is one example:
You get into a car accident where you are at fault. Your insurance policy covers you for $500,000 in 3rd party damages. However, the other individuals in the car accident needed medical attention and future treatment for rehabilitation. On top of that, their car was totaled. The total damages for the other party are more than $650,000.
You are responsible for the remaining $150,000 that your $500,000 insurance policy did not cover. If you have an umbrella insurance policy, it would then kick in to cover this excess liability. If you do not have an umbrella policy, would you be able to foot the bill? If you cannot pay for the remaining balance, a court may issue your future wages to be garnished.