Umbrella Insurance
Umbrella insurance refers to liability insurance that is in excess of specified other policies and also potentially primary insurance for losses not covered by the other policies.
When an insured is liable to someone, the insured’s primary insurance policies pay up to their limits, and any additional amount is paid by the umbrella policy (up to the limit of the umbrella policy).
Excess insurance is similar in that it pays after an underlying primary policy is exhausted, but is different in that it normally applies to only one underlying primary policy and covers only those losses that are covered (up to policy limits) by that primary policy.
Personal umbrella policies are typically made excess of a person’s homeowner’s and automobile insurance.
Should I get Umbrella Insurance?
Maybe you have been told that you should get Umbrella Insurance? Maybe you heard about Umbrella Insurance and wondered exactly what it is? Maybe you have asked yourself “should I get Umbrella Insurance?” Hopefully I can help you make that decision.
First, What is Umbrella Insurance?
Umbrella Insurance is sometimes called Excess Liability coverage. That is exactly what it is: extra liability coverage to protect you and your household if you are sued for a lot of money. It is extra coverage because you already have some liability coverage on both your home and your auto insurance and so it will kick in once the liability limits on those policies is exhausted.
Ok, so now you are probably thinking that you don’t need Umbrella Insurance because you will probably never be sued, but don’t stop reading just yet.
No one ever plans on getting sued, but accidents happen.
And even though they are accidents, if you are held liable then your home, cars, retirement fund, and even future earnings could be at risk.
These are things that happen in every day life that you could be held liable for.
- You cause an accident on the freeway that injures multiple people and damages a long line of cars.
- The plumber leaving your house slips and falls on your icy sidewalk resulting in bodily injury and loss of income for his family.
- Your favorite old pine tree is blown over in a storm and damages the neighbor’s house and cars.
- Your dog gets loose and bites some of the neighbor children running down the street.
- The neighbor kid falls while jumping on your trampoline an brakes his arm, leg, or neck.
- A momentary lack of judgement and you say or write something false about someone from your town that causes them personal damages.
- Your son tackles someone playing football and they are seriously injured.
- Many other instances of bodily injury or property damage that you or you family cause.
How much does Umbrella Insurance cost?
It is very affordable for how much coverage it offers you. $1,000,000 of excess liability coverage can usually be found for around $200 a year, depending on individual circumstances.
You do have to have a certain amount of underlying liability coverage on your home and auto insurance policies, so there may be additional costs in upping those coverage amounts as well.
Should I get Umbrella Insurance?
Short answer is “Probably.” If you feel like any of the above scenarios COULD happen to you and have assets worth protecting, an Umbrella policy is an inexpensive way to protect, you, your family, and your assets. It is super easy to get a quote and at least investigate the possibility.
Next Steps
If you are interested in additional liability protection but still are not sure on the answer to the question Should I get Umbrella Insurance? Get a quote. We are not going to push you one way or another, but just help you decide what is best for you.
Examples of why you would want to have Umbrella Insurance.
Here are some examples of incidents an umbrella policy could cover if your homeowner’s insurance or auto insurance wasn’t enough: *Your dog runs out of the house and viciously attacks a neighbor who was going for a walk. Your neighbor sues you to cover her medical bills, lost wages, and pain and suffering. *Your daughter gets into a fight at school and punches another girl, breaking her nose. The girl’s parents sue you. *You cause a 10-car accident and your auto insurance property damage coverage isn’t high enough to replace all 10 accident victims’ vehicles. Nor is your personal liability coverage high enough to pay for their medical bills. *You send sandwiches to your son’s school for a field trip lunch. Several students develop food poisoning and their parents sue you. *Your teenager throws a party at your house while you’re out of town. Someone brings alcohol to the party, and one of the guests is arrested for driving under the influence on the way home. You are sued.