Protecting your family and assets is a top priority, which is why people secure insurance. While you may be inclined to think that your current home, auto, and other insurance policies are enough, in this litigious society, personal umbrella coverage is often needed. Umbrella coverage guarantees protection for your wallet and loved ones.
Umbrella Insurance Coverage
Umbrella insurance is designed to protect you from large and potentially devastating liability claims or judgments. Personal umbrella coverage picks up where your current personal policies (such as homeowners and auto insurance) end, helping to safeguard your finances. Just like an umbrella shields you from the rain, an umbrella policy provides an additional level of protection in the event of an accident.
Umbrella insurance typically covers:
- Bodily injury
- Personal injury
- Property damage
- Landlord liability
It is important to note that personal belongings, business losses, intentional or criminal acts, and written or oral contracts are not covered. Common situations that result in lawsuits include dog bite liability claims, injuries on your property, and multi-vehicle car accidents. Fortunately, umbrella insurance can step in to help cover these costs.
How Does an Umbrella Policy Work?
To better understand how an umbrella policy protects you, here’s an example. Say you are at fault in a car accident that injures another driver. Your auto insurance may cover the other driver up to the limit that you selected, say $250,000. Unfortunately, the other driver’s injuries so severe that $250,000 doesn’t cover it. What’s more, he’s suing for your $1 million to cover the six months he’s out of work.
Not only are you responsible for damages beyond the $250,000 your car insurance policy covers, but you now have a lawsuit to face. A personal umbrella policy can cover the additional costs, such as the remaining $750,000 when your auto policy reaches the limit. This extra protection means that your bank account, home, and personal property are not in jeopardy.