How it Works & What it Covers
What is umbrella insurance?
Insurance that extends beyond the limitations and coverage of previous policies is referred to as an “umbrella policy.” Certain lawsuits and personal responsibility scenarios may be covered by an umbrella policy.
How does an umbrella insurance policy work?
Protecting your assets and future are two significant benefits of umbrella insurance coverage.
- When the limitations of your primary policies, such as those for your home, car, and boat, are reached, umbrella insurance can step in to help cover the costs.
- Claims such as false arrest, libel, slander, and liability coverage for rental units you own are covered by umbrella insurance, which may be excluded by other liability policies.
What does umbrella insurance cover?
Insurance provided by an umbrella policy extends protection beyond the limits of your other policies or to claims not covered by liability insurance. In most cases, an umbrella policy provides coverage for the following:
- Damage to property
- Certain lawsuits
- Personal liability situations
Who needs umbrella insurance?
You’re thinking, “Some of these circumstances are covered by my auto and homeowners insurance.” True! The additional protection provided by an umbrella policy, on the other hand, goes above and beyond the terms of most other types of insurance. Get an umbrella insurance quotation today by calling — the costs are lower than you think!
Examples of Umbrella Insurance Coverage:
Bodily injury liability covers another person’s injuries as a result of the collision. Medical costs and/or responsibility lawsuits owing to injuries caused by these incidents are examples:
- Involvement in a life-threatening motor vehicle collision for which you bear responsibility
- Your dog’s actions may cause harm to others.
- A visitor to your home suffers a mishap.
- While playing in your yard, a neighbor’s child falls.
Property damage liability pays the expense of harm or loss to the tangible property of another individual. Damage to vehicles and other property caused by an accident in which you are at fault can be an example.
Owners of rental units can shield themselves from any legal ramifications that come with becoming a landlord. Due to these factors, liability claims can be expensive:
- Someone suing you for damages after tripping over a crack in the sidewalk of your rental property.
- If your tenant’s dog bites someone and you’re held liable, it’s your responsibility.
Coverage is also provided if you’re sued for:
- Wrongdoing: a defamatory utterance
- Libel is a defamatory declaration in writing.
- False incarceration, confinement, or detention of a person.
- Malicious prosecution
- Mental anguish/shock
What is not covered by an umbrella policy?
The following items are typically excluded from coverage under an umbrella policy:
your injuries or property damage
harm is done to another person through an illegal or deliberate conduct
How can umbrella insurance help protect you?
To further explain how an umbrella policy might protect you, let’s take a look at an example. Let’s imagine you’re at fault for a car accident that results in $50,000 in medical bills for those injured. Let’s further imagine that your motor insurance has $300,000 in bodily harm liability limits. The $300,000 in medical expenses will be covered by your car insurance. It’s not clear who will pay the remaining $200,000 in costs.
This is something your general liability insurance will cover. Your umbrella coverage will cover any sum over your auto insurance policy’s limit, up to the limit you select for your policy.
Here’s a summary of the entire cost, where your auto insurance limitations can be surpassed, and how umbrella insurance might help you protect yourself: :
|Total Cost of Car Accident
|Auto Insurance: Bodily Injury Limit
How much does umbrella insurance cost?
The cost of an umbrella policy is partially determined by the amount of coverage you purchase. Your location, the number and types of vehicles you own, the number of homes you own, and other items can all affect the premiums you pay for your umbrella insurance. If you’re looking for an umbrella insurance policy, we can assist.
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