Umbrella liability insurance protects you if you find yourself the subject of a lawsuit and when you reach the limits of your regular liability insurance. Some people do not need it, but this coverage can take away significant financial worries.
What is umbrella liability insurance?
This type of insurance is additional coverage on top of your regular liability coverage. Umbrella liability insurance would cover you if you had a large claim where you were at fault or a lawsuit against you. This type of insurance protects you against the high expenses that result from situations like this.
How does it work?
Umbrella liability insurance provides coverage when you exceed the limits of your regular liability insurance. This applies to your liability of every type, including home, auto, and boat insurance. When you reach your limits on any of these standard liability policies, your umbrella insurance kicks in to prevent the rest of the rain, the costs, from getting through.
Umbrella insurance may also cover the costs of what is excluded from your other liability policies. This can include libel, rental property liability, and more.
What is covered?
Your umbrella liability policy may cover the costs of injuries, property damage, and lawsuits. Your home and auto policies may already cover some of these events, but if you hit your limits, you’d need umbrella insurance coverage.
Bodily injury coverage is part of an umbrella insurance policy that covers physical damage to anyone except those living in your household. This includes the claims and medical bills of the person who suffered the injuries. For example, suppose you are at fault in a car accident that causes someone to be injured. In that case, if someone is injured by falling into your house or yard, or if someone is injured by someone in your household, such as a child or dog, you are covered by bodily injury coverage.
Property damage coverage covers loss or damage to another person’s property. This can help you if your auto insurance funds run out during fixing the vehicle of the person you crashed with. It may also offer you coverage if your child or pet destroys or damages property while at a friend’s house or school.
Your umbrella policy may also cover you if you own property that you lend to rent to someone. If someone is injured on your property and the person files a lawsuit against you, your policy will protect you from that cost. Also, you may be covered if one of your tenants’ pets injures someone and that person claims as a result.
Your umbrella insurance will cover the costs of a judicial process. When your attorney defends you in court after someone files a lawsuit against you, you may have to pay a portion of the costs out of pocket. Cases take a long time and are also expensive. It’s elementary to reach the limits of your regular coverage quickly. An umbrella insurance policy can protect you from having to pay the rest of the costs.
If your property damage liability limits are $250,000 on your auto insurance policy, you hit someone’s house, and you are at fault, your liability coverage will pay. However, if the claim turns out to be $300,000 and you don’t have an umbrella insurance policy, you’ll pay the remaining $50,000 out of pocket. With umbrella liability insurance, the rest of the claim will be covered.
Do I need an umbrella liability insurance policy?
This type of insurance is not necessary for every person. Think about whether someone is likely to file a lawsuit against you. If this probability is high, for example, you may need to purchase an umbrella insurance policy if you own multiple rental properties or have multiple territorial (aggressive) dogs.
It would help if you also considered whether you could pay court costs or other costs that exceed your liability limits. Do you have the money to pay the expenses, including court fees, of a lawsuit?
Now that you know more about umbrella liability insurance, you can decide if you need it. If you’re unsure or want to start a quote, you can call an Infinity agent at 1-800-INFINITY. Also, you can get a quote online.