Personal Umbrella Form

Umbrella insurance is a type of personal liability insurance that can be indispensable when you find yourself liable for a claim larger than your homeowner’s insurance or auto insurance will cover. If you own a boat, umbrella insurance will also pick up where your watercraft’s liability insurance leaves off. Umbrella insurance even covers certain liability claims those policies may not, such as libel, slander, and false imprisonment. And if you own rental property, umbrella insurance provides liability coverage beyond what your renter’s policy covers.

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.

One great thing about umbrella policies is that they provide broad coverage. They cover any incident that the policy does not specifically exclude, unlike some insurance policies, which only cover specifically named incidents. But no insurance policy covers everything. Here are some things your umbrella policy likely won’t cover: *Damage to your own property. Remember, it’s a liability policy, so it will only cover you if you’re held responsible for damage to someone else’s property. Make sure you have enough homeowner’s insurance to protect your own property and possessions.*Damage that you or a covered member of your household cause on purpose. If you deliberately pushed your party guest down the stairs, umbrella insurance wouldn’t cover the costs of the lawsuit or judgment (and neither would your homeowner’s insurance).Liability incurred in business or professional activities. You’ll need business liability insurance to cover these incidents.*Liability you agreed to assume under a contract you signed. *Liability related to war or armed conflicts. Good luck finding any type of insurance that covers war-related damage; the financial losses associated with war are too high for insurance companies to cover. *The Bottom Line: Even the most careful person with the best intentions can end up on the hook for a huge judgment from a personal liability lawsuit. While you’re unlikely to find yourself in this situation, it’s still smart to protect yourself against such a devastating financial loss. Umbrella insurance can help you do that.