Protections Afforded By an Umbrella Insurance Policy
Umbrella insurance has nothing to do with keeping you dry but it might protect you if your homeowners, vehicle, or boat policy doesn’t. Specifically, it is designed to protect you from liability which exceeds the limits of the other policies mentioned. In addition, it can protect from some specific forms of liability like libel or slander as well as injuries to others.
The Way Umbrella Insurance Plans Work
First, umbrella insurance plans require that the policy holder already own a vehicle liability policy or homeowners policy. The umbrella coverage is attached to those policies. While it covers several other forms of liability, most people purchase it in case an accident that injures another party or parties exceeds the limits of liability on their homeowners or vehicle policy. The umbrella policy covers the amount in excess of that policy up to the limits you’ve purchased on your Umbrella policy.
Why Might You Want Umbrella Insurance Coverage?
If you have expensive property or extensive savings you might want an umbrella plan insurance to protect those assets from lawsuits. Some other considerations might be if you
- Own rental properties
- Coach children’s sports or other activities
- Serve on the board of a non-profit
- Participate in sports where you might cause other’s injury
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What A Personal Umbrella Policy Covers
Personal injury to others, bodily injury to others, property damage to others as well as coverage for landlords and some libel and slander lawsuits are all part of the personal umbrella insurance coverage. Note, that it does not cover the policyholders injuries, or property nor any injuries or property loss to members of their household.
Excess Liability and Personal Umbrella Insurance The Same or Different?
Excess liability insurance and umbrella insurance do some of the same things but are different from each other. Excess liability insurance will cover the same things as the existing policy to which it is attached just raise the dollar limit but it does not cover some of the unique features of the personal umbrella policy insurance coverage. For example, libel, slander and other defamatory lawsuits are covered by the umbrella policy but not by excess liability.
In terms of value, the cost of providing the extra protection that an umbrella insurance policy provides is money well spent. Coverage costs in a recent survey were found to be $13-$28 per month added to your homeowners policy. If you need the coverage because of assets, activities or you’re a landlord getting a umbrella insurance quote,
Here at ConsumerCoverage it makes sense.
Scenario Where an Umbrella Policy Might Come Into Play?
You’re driving your vehicle and are involved in a multi car accident for which you are found to be at fault. You have a medical payment limit on your policy of $100,000 but the injuries to others result in medical bills in excess of $250,000. The umbrella policy which you have covers up to $1,000,000 so it picks up the additional $150,000.