Umbrella insurance is a security blanket that picks up where your other insurance policies leave off. Standard insurance policies usually have a cap that prevents further payouts once the maximum limit has been reached. Without an umbrella policy in place, you would be required to come up with the amount that is not covered by your standard insurance policy. An umbrella policy is designed to protect you from excessive financial loss in the event of an unfortunate accident.
How Does an Umbrella Policy Work
An umbrella insurance policy works almost the same way as other types of insurance. However, instead of covering liability claims, it acts as a backup for other insurance policies. For example, auto, home, and commercial insurance policies have a cap or maximum payout. If a claim results in a payout that is higher than the cap, you will have to find a way to cover that amount on your own. This is where having an umbrella policy proves beneficial. It picks up where your other policies leave off, acting as a security net to protect your important personal and commercial assets.
What Is Covered
An umbrella policy will cover almost any type of claim that exceeds your standard insurance coverage. This includes:
- Bodily damage liability–
Injuries like dog bites, slip and falls, or tripping over an obstacle are covered
- Property damage liability–
Damages caused to a third party’s property are covered
- Owners of rental units–
Claims you might face as a landlord, including personal injury or property damage, are covered
Talk to your agent if you have questions about your policy limits and the amount of umbrella insurance you need.
What Is Not Covered
Your umbrella insurance policy will not cover any claims of damage to your personal property or any injuries sustained by you. It will not cover you for any intentional acts of negligence or other criminal act resulting in third-party damages. This policy will not cover any contractual liability assumed by you.
Who Needs Umbrella Insurance
Though not mandated by law, an umbrella insurance policy is ideal for people who have high-value assets or are more likely to be sued. The following are a few scenarios where you might consider buying an umbrella insurance coverage-
- You are traveling outside U.S and need protection against potential liability claims
- You have an inexperience driver, say your teenager who just learned driving, in your home
- You hold frequent parties at your home
- You are a public figure
- You own amenities that can cause injuries to visitors to your home, such as trampolines and swimming pools
- You are actively engaged in sports that could harm others, such as hunting, surfing, and skiing
- You own high-value assets or have a substantial amount of savings
Having an umbrella insurance place will give you the protection you need to secure your personal and business assets in case of an accident. Our experts at Burton A. Harris Insurance Agency have the knowledge and expertise you can rely on to make sure you have the right amount of coverage in place to secure your assets. Contact us today to get started!