Umbrella Insurance Can Save You From A Rainy Day
Umbrella insurance is designed to increase the liability limits of standard policies such as homeowners, auto, and boat insurance. For example, let's say a neighbor is swimming in your pool. He decides to jump out and dive in. While running, he trips over an uneven crack in the concrete and cracks his head. He decides to sue you to pay his medical bills and lost wages due to the accident.
If you're thinking, "I'm sure my home insurance will pay for that," think again. It will likely pay for a portion of the cost, in other words, up to the liability limit. The costs beyond that could be your responsibility depending on what the court decides.
That's where Umbrella insurance, also known as excess liability, kicks in. Many policies offer liability limits of $1 to $5 million. That means if your home insurance policy provides $100,000 liability coverage and your neighbor sues you for $300,000, your Umbrella insurance would cover $200,000 of the damages.
Coverage types can include:
• Bodily injury liability – damage to another person's body
• Property damage liability – damage to another person's property
• Personal liability – damage to others that occurs off your premises
This policy can also provide coverage when non-business related liabilities occur, including:
• Slander/libel – injurious spoken or written statements
• False arrest
• Malicious prosecution
• Wrongful eviction
• Mental anguish
A good rule of thumb is anyone whose total assets exceed the total liability coverage of the home, auto, and boat insurance policies they own. In other words, the more assets you have, the more you need because you're more at risk of attracting lawsuits.
The biggest benefit is the peace of mind offered should an incident take place. The next biggest benefit is the cost. Umbrella policies are notorious for offering a high amount of coverage for very little cost. Some policies cost as little as $1 per day. Learn how Umbrella insurance can directly benefit you with a quick call with one of our advisors.