You don’t have to be a millionaire to be sued like one.
A personal umbrella insurance policy is an optional coverage that extends the liability coverage of a preexisting policy such as homeowners insurance or car insurance. That means that if you’re guilty for damages beyond your insurance policy’s limits, you have an extra padding of protection to help pay those expenses (and keep from paying out-of-pocket instead).
Who Should Get a Personal Umbrella Insurance Policy?
Expensive accidents happen every day, and can happen to anyone. That’s why anyone with an insurance policy could benefit from having a personal umbrella policy.
These policies can protect you from having to pay huge, out-of-pocket bills for medical or legal bills you’re liable for.
Something else to keep in mind is that umbrella insurance typically extends to family member as well, including relatives who do not have insurance in their own name. That means that if a member of your household is sued for a defaming comment or gets in an accident, your umbrella policy could cover them as well.
Certain lifestyles or hobbies can make you more liable for potential payouts if you don’t have the proper insurance coverage. Let a Pfarr Insurance Agent help you decided whether or not a personal umbrella policy is right for you.
What is Covered Under a Personal Umbrella Insurance Policy?
Typically, the following are covered under and umbrella insurance policy:
- Bodily Injury
- Personal Injury
- Property Damage
- Landlord Liability
What Isn’t Covered by an Umbrella Insurance Policy?
- Personal Belongings. If your negligence destroys your personal property, personal umbrella insurance policies cannot help pay for damages or repairs. However, if your negligence damages or destroys someone else’s property, your umbrella insurance may kick in to help pay for the damages and repairs needed for their property.
- Business Losses. Umbrella insurance policies are not meant to cover business-related claims such as malpractice.
- Criminal or Intentional Acts or Omissions. A personal umbrella insurance policy will not help pay for anything connected to criminal activity, such as paying restitution or bail.
- Written or Oral Contracts. A personal umbrella insurance policy won’t cover you from any liability expenses connected to any sort of contract.
How Umbrella Insurance Works
Take this example.
Let’s say you were lighting off fireworks for the fourth of July when suddenly you smell smoke. You turn around to see that not only have you caught your home on fire, but your next-door-neighbor’s as well.
In the aftermath, that neighbor decides to sue you for $2 million in damages. However, your homeowners policy only covers up to $300,000.
This is one of those situations where umbrella insurance comes in handy. An umbrella insurance policy can help cover the remaining costs and keep you from having to pay for things yourself.
Typically, personal umbrella insurance policies cover between $1 million to $5 million.
Thinking of adding a personal umbrella insurance policy? Talk to your agent about whether it’s right for you and how to proceed.
