Umbrella Insurance

When It Rains, It Pours…

Especially when it comes to unexpected accidents or claims.

What is Umbrella Insurance?

You never know when it might rain. So just like the name implies, this type of policy acts like an umbrella, providing protection against a wide range of potential financial dangers, and unforeseeable mishaps.

Umbrella insurance is a form of liability insurance, therefore it does not cover:

• Your own medical expenses.
• Losses to your property.

However, what exactly is covered by your umbrella policy depends on how you decide to set it up. In most cases, umbrella insurance protects you from:

• Injuries you cause in a car accident
• Injuries someone suffers on your property
• Property damage you cause in an accident
• Property damage your pet causes
• Property damage a dependent or child causes
• Attorney fees and other legal costs if you’re sued

Yes, your existing insurance may protect you to an extent, but an umbrella policy goes much further for less cost than upping the limits on your existing policy because it covers for different types of risks. Umbrella insurance is also portable, in most cases; so it can follow you when and wherever you travel―even overseas.

Since the terms of umbrella insurance policies will vary, depending on insurance companies, and your own personal needs, a qualified insurance agent from our firm is the best person with whom to discuss the benefits, restrictions, and coverage from each carrier they represent.

More information about umbrella insurance:

An umbrella insurance policy is additional liability insurance coverage that exceeds the limits of the insured’s homeowners, auto, or watercraft insurance. It offers additional security for those who are at risk of being sued for damages to other people’s property or injuries caused during an accident. This coverage also safeguards you against libel, vandalism, slander, and invasion of privacy.

Key Takeaways

• An umbrella insurance policy is a kind of personal liability coverage that goes beyond the expenses of a regular home or vehicle insurance.
• In order to avail of umbrella insurance, you must also own standard homeowners, auto, or watercraft policy first. The umbrella policy will apply after the regular coverage has been exhausted.
• Potential candidates for umbrella insurance are people who have considerable assets or potentially hazardous things and who also engage in activities that could increase their risk of being sued.

How an Umbrella Insurance Policy Works

The added insurance coverage you get from an umbrella insurance policy is most advantageous to high net worth individuals who own many assets or very expensive assets and are at significant risk of being sued. Small businesses also use this kind of insurance policy to protect them against potential monetary damages arising due to claims.

The premium expenses for an umbrella insurance policy may be less expensive if the policy is bought from the same insurance company that provided the original auto, home, or watercraft insurance. If the policyholder wants to add an umbrella insurance policy, their required base insurance coverage for auto insurance is $150,000 to $250,000 and $250,000 to $300,000 for their homeowners’ insurance. This all depends on the insurance provider.

Furthermore, umbrella insurance is usually referred to as excess liability insurance. If you are sued for damages that exceed the liability limits of car insurance, homeowners insurance, or other kinds of coverages, an umbrella insurance policy will help pay what they owe. This means that if the dollar limit of the original policy has already been used up, the umbrella policy acts as a fail-safe so you don’t have to use your savings or your other assets.

Important to note:

Umbrella insurance may also provide you some coverage not covered in a standard insurance policy such as libel, slander, and false imprisonment.

Aren’t people with a lot of assets the only ones who need umbrella insurance?

Actually, anyone with a job who expects to keep the income they earn, could benefit from having an umbrella insurance policy.

What would happen, for example, if someone made a delivery to your house, slipped on a sidewalk recently wet by your sprinkler system, and suffered severe head injuries from the fall. They will sue you, of course.

Your homeowners insurance kicks in, and pays up to its maximum limits. But the jury finds you are responsible for an extra $500,000 over your homeowner’s limits.

Ask yourself: How long would it take you to pay that off with your weekly paycheck?

Umbrella insurance covers the amount that exceeds your homeowner’s coverage, usually up to $5 million-sparing you from a financial nightmare, along with paying the attorney to help you survive it.

Are Umbrella Policies Expensive?

Relative to the amount of protection you get, umbrella insurance is highly affordable. Especially since it’s unlikely you will ever have to make a claim against it. So your specific cost will be determined by:

• The amount of coverage you purchase
• Your insurance carrier’s provisions
• Your risk profile and driving record

You can save even more money by purchasing umbrella insurance from the same carrier who provides your home and/or auto insurance-check with us to make sure.

Tell me again why I need Umbrella Insurance?

A long time ago, you set some goals, made a plan, worked hard and got “there”. As you did, you accumulated possessions. Not to be ostentatious, but enough to make you and your loved ones comfortable.

You are rightly proud of these accomplishments. In fact, you have protected them with the best insurance you could.

Now you need extra protection, an umbrella insurance policy. A policy that will cover you above and beyond what any single policy might cover.

For example: What are your limits on your auto and home liability policies: $300,000 to $500,000?

If you get into an auto accident … or someone falls into your pool and hits their head … or whatever fluke occurrence-you can be sued. And what if the award goes to the plaintiff?

Okay, you say, the insurance will cover it. But what if the amount is over the policy limits? (That happens, especially if you have nice things.)

Your standard home or auto policy is likely not going to be enough to cover what the plaintiff is asking for.

How will you pay the judgment? How will you even defend yourself in such a lawsuit? Can you actually lose all you have strived for?

You bet you can. Not only can you lose what you worked for, but you can also lose part of your wages for the rest of your working life. (Most people don’t know this.)

They Want It Because They Can

In our society, three things work against you:

• It cost nothing to initiate a lawsuit
• Juries and judges are unpredictable
• Defending yourself costs enormous sums of money

One other factor also comes into play: They want it because they can.

Special Considerations

People who often purchase umbrella insurance will usually have expensive property or have significant savings. They may also own dangerous things that can cause injuries such as swimming pools, trampolines, and even dogs. They might also engage in different activities that may increase their chances of lawsuits such as:

• Being a landlord
• Coaching kids’ sports
• Serving on the board of a non-profit
• Volunteering
• Regularly posting reviews of products and businesses
• Participating in sports where you could easily injure others such as skiing, surfing, hunting, etc.

What Situation Would You Need An Umbrella Insurance Policy?

Consider the following scenario or example in order to understand how umbrella insurance works and can help. One instance is when a driver runs a red light and accidentally hits another car, there might be, of course, significant damage to the vehicle and people might be injured.

The driver who caused the accident may be liable for expenses that go far beyond the coverage limits of their insurance. For example, the repairs might total $50,000 and the treatment of the injuries might also reach $500,000. An umbrella insurance policy will be responsible for the additional liability costs beyond the limits of your car insurance coverage.

Why We’re Different

You may think you want the cheapest insurance you can find, but realize you may not be getting everything you bargained for…

While most insurance products are similar in price and function, insurance providers are very different when it comes to structuring a policy that actually covers you.

There’s no such thing as a one-size-fits-all insurance policy when it comes to your business.

We’re your neighbors. We protect businesses and people we know and care about, and that means we always look for ways to protect you better, including carefully choosing the insurance companies we represent to be both affordable and responsive.

Contact us and let the professionals at our company help you forge the strongest shield possible to help you protect the things you are working hard to build.