One of the many topics I cover with my clients currently is Risk Management. How do we defer this away from ourselves? Getting an Umbrella Insurance Policy helps protect our assets that we’ve worked so hard to build. This isn’t something that I can do for you, this is something you would get through your current Property/Casualty Insurance Agent. Even though I don’t do this business, its very Important!
Umbrella insurance coverage helps protect you from the costs of covered claims when those costs exceed the limits of your home insurance or auto insurance policies. An umbrella policy can help cover defense costs when you are being sued for damages to someone else's property or injuries caused to others in an accident.
Umbrella insurance can provide coverage for injuries, property damage, certain lawsuits, and personal liability situations. Umbrella insurance may provide coverage when your homeowners, auto, and boat insurance policies limits are exhausted.
Bodily injury liability covers the injuries sustained by another person because of the accident. Examples include the cost of medical bills and/or liability claims due to injuries caused by:
- A serious auto accident where you're at fault
- Harm caused to others by your dog*
- A guest in your home falls
- A neighbor's child falls while playing in your yard
Property damage liability covers the cost of damage or loss to another person's tangible property. Examples include the cost associated with damage to vehicles and other property due to an auto accident where you are at fault.
Owners of rental units help protect against liability that you may face as a landlord. Examples include the cost of liability claims due to:
- Someone tripping over a crack in the sidewalk of your rental property and suing you for damages
- Your tenant's dog* biting someone and you being held responsible for the injuries
- Coverage is also provided if you're sued for:
- Slander: An injurious spoken statement
- Libel: An injurious written statement
- False arrest, detention, or imprisonment
- Malicious prosecution
- Shock/mental anguish
What is not covered by an umbrella policy?
An umbrella policy generally does not provide coverage for:
- your injuries or damage to your personal property
- a criminal or intentional action causing damage to someone else
- liability you assume under a contract
How can umbrella insurance help protect you?
Let's look at an example to help you better understand how an umbrella policy would work to protect you. Let's say you cause a car accident and the cost of the injuries you cause to others is $500,000. Let's also say that the bodily injury limits on your auto insurance are $300,000. Your auto policy will cover $300,000 of the injuries. But who will cover the remaining $200,000?
Your umbrella insurance policy will. It will cover the amount above the limit set in your auto insurance policy, up to the limit you choose for your umbrella policy.