What is Umbrella Insurance?
Life is full of unknowns, and accidents can occur at any time. A personal umbrella policy can add an extra layer of protection to what matters most.
Protection from Umbrella Insurance
Umbrella insurance can be added to an existing homeowner's, auto, or boat insurance policy. It typically covers bodily harm, property damage, and certain lawsuits or liabilities brought against you.
The umbrella policy can increase the underlying policy's liability limits, providing additional liability protection against liability lawsuits. It can also fill in coverage gaps left by standard insurance policies. Increasing the limits on one or more policies can be costly and leave gaps in coverage. A single umbrella policy can help broaden your liability coverage and fill some gaps.
Is Umbrella Insurance Necessary?
Almost everyone can benefit from the coverage provided by an umbrella insurance policy. If you engage in any of these activities or have any of the following circumstances, you may benefit from the additional liability protection provided by an umbrella insurance policy:
Hosting parties or gatherings at your residence
Having a car (especially if you have multiple drivers on your policy)
Having a dog
Possessing a swimming pool
Own a home
These are just a few examples of how umbrella insurance can be beneficial. The takeaway is that any activity that puts you or members of your household at a higher risk of a liability lawsuit may indicate that umbrella insurance is appropriate for you.
An Illustration of How Umbrella Insurance Works
Assume someone trips and falls at your house and is hurt. The liability limit on your homeowner's insurance policy is $500,000. The person who came to your house was severely injured and decided to sue you to pay for the required costly medical treatment. You go to court, and the injured party is awarded $750,000. Because your homeowner's insurance only provides $500,000 in liability coverage, the umbrella policy will cover the remaining $250,000,
In this case, you would be liable for the additional $250,000 that your homeowner's policy did not cover if you did not have umbrella coverage. In the event of a liability lawsuit, umbrella insurance could potentially save you from financial ruin and the loss of your home and belongings.
How Much Does Umbrella Insurance Cost?
The cost of umbrella insurance is determined by several factors, including where you live, how much coverage you require, and how risky the insurance company believes you are. According to the Insurance Information Institute, the cost of a personal umbrella insurance policy for $1 million in extra protection ranges from $150 to $300 per year - a relatively low premium for increased protection.
Exclusions from Umbrella Insurance
Personal umbrella insurance does not cover every type of injury or damage. Here are some examples of things that are typically not covered:
Injuries to yourself or family members that occur in your home
Criminal acts or intentional acts that cause harm to others or property damage
Business property damage
Requirements for Eligibility
To obtain umbrella insurance, you must first have an underlying policy to which you can add liability coverage, such as a homeowner's or auto policy. However, a few insurers do provide a standalone umbrella policy.
Life is full of unknowns. Personal umbrella insurance can provide you with peace of mind by providing you with the additional liability insurance coverage you require. Contact us today for a personalized personal umbrella insurance quote.