Umbrella insurance increases liability limits of standard insurance policies. This includes insurance coverage such as homeowners, auto and boat insurance. It helps in many cases, including ones in which you are sued. For example, imagine a neighbor is on your patio and trips over an uneven crack in the concrete. He fractures his head, and decides to sue you for his medical bills and lost wages.
You might think your homeowner’s insurance will pay. However, it’s likely to pay for only a portion of the cost. There is a liability limit which limits how much your insurance will pay. Any cost above that is your responsibility if the court decides you must pay. That is why umbrella insurance is sometimes referred to as excess liability.
Most policies have liability limits of $1 to $5 million. If your home insurance policy provides $100,000 liability, and your neighbor sues you for $300,000, then umbrella insurance would cover $200,000 worth of damages.
Coverage can include:
• Bodily injury liability that covers damage to another person's body. • Property damage liability which covers damage to another person's property. • Personal liability for when someone sues you for damages.
The policy can also provide coverage for non-business related liabilities, such as:
The more assets you own, the more umbrella coverage you need. The reasoning is the more assets you have, then the more likely you are to attract lawsuits. Considering that, the biggest benefit of umbrella insurance is peace of mind offered. The next biggest benefit is the cost. Umbrella policies offer significant coverage for little cost. Speak with an insurance agent to learn more about umbrella insurance.