Personal Umbrella insurance is one of the most valuable coverages and typically very inexpensive. Umbrella insurance generally should service two main purposes:
- Extended liability protection above your primary policies
- Fill in some of the gaps your primary policies may not offer.
Extended Liability protection:
Your Auto, Home, Boat and other policies with your primary insurance carriers have maximum limits or limits, that you decided to purchase; however, in case of a claim, you might be liable for greater amounts than your primary insurance policies’ limits. That’s where Umbrella insurance kicks in. It will extend the coverage above your limits of liability on your primary policy. Usually Umbrella policies are sold in increments of $1 million dollar.
Here is a common example of Umbrella policy in action. You have an Auto insurance policy with Bodily Injury Liability limit per person at $250,000 and you have a $1 million Umbrella. You were involved in an accident with another driver, who was severely injured. Bodily Injury claim ended up being $800,000. In this case your Auto insurance policy will pay $250,000 since this is the limit of Auto insurance liability you purchase and Umbrella will cover the rest of the claim within the limit of Umbrella. So, Umbrella will pay $550,000 since it’s within its limit of $1 million dollars. If you didn’t have an Umbrella policy, you’d personally be responsible for $550,000 and your personal assets might be at risk.
Fill in some gaps your primary policy may not cover:
Your Auto insurance will pay for Bodily Injury and Property Damage, but not for Personal Injury claims that may arise. Most “true” Umbrella policies (not just Excess Liability policies) will offer additional protection, such as Personal Injury coverage. This type of coverage may include protection against claims of defamation of a character, privacy invasion, false arrest or imprisonment, malicious prosecution, wrongful entry or eviction. Umbrella may also extend coverage to claims of dog bites, which dog owners find very useful since average dog bite claim is in $30,000 range or so.
The best part is that Umbrella policies are fairly inexpensive for such a huge amount of coverage. The price will depend on your specific situation.
Contact us for a free quote or consultation today.