The independent brokers at Compare A Quote can provide you with all kinds of insurance to protect your assets, including an umbrella policy. This is a secondary form of insurance requiring a primary policy that is the first payout on a claim before the umbrella coverage becomes effective. For example, a home insurance policy provides the direct liability of a loss. Once the amount of money in the homeowner’s liability is exhausted, the umbrella insurance kicks in to cover the remaining liability. It can protect you from the kind of financial devastation that sometimes arises if someone sues you for property damage, injury, and associated legal defense costs.
In the most straightforward definition, Umbrella insurance is a type of insurance used for any additional liability claim greater than your homeowner’s, or auto insurance can cover. If you own a boat or any watercraft, umbrella insurance will supplement the coverage where your policy leaves off. Umbrella insurance ever covers specific liability claims your base policy mat not, false imprisonment, slander, and libel. If you own a residential or commercial rental property, an umbrella insurance policy can provide the additional liability coverage your renter’s policy does not. Umbrella insurance is extra liability insurance coverage that goes beyond the limits of the insured’s home, auto, or watercraft insurance. It provides an additional layer of security to those at risk of being sued for damages to other people’s property or injuries caused to others in an accident.Umbrella insurance is an inexpensive option for the kind of protection you can hardly afford not to have. It can cost as little as 20% of your current home, auto, or watercraft insurance for one to five million dollars’ worth of additional liability insurance.
Your umbrella policy is additional coverage to your homeowner's and auto policy and will only take effect if the homeowner's or the auto coverage is not enough. Here are a few examples:
The term umbrella is not just a catchy name; its roots go back to 1949 when the first policies were sold and became widespread in the 1960s; although coverage details had assorted changes over a few decades, the basis and principals of the coverage are the same.
As the examples show, umbrella insurance covers you as the policyholder and other family or household members. So if your teenager isn’t the most responsible driver, you can rest easy at night knowing you’re protected with an umbrella policy that will cover the injured parties’ medical bills if you or your kids are found at fault for a significant accident. Please take the time to understand how your policy defines a household member, so you’ll have the coverage you need.
Please note that even though umbrella insurance includes coverage exceeding the limits of your homeowners, auto insurance, and boat policies, it does not substitute for these policies.
The event doesn’t have to involve your property for the umbrella insurance to cover it. In addition, you’re also covered outside your home, in other states, and worldwide. Except for ownership of homes and cars owned under other countries’ laws. Please ask your agent and check your policy if this applies to you.
Auto Insurance, homeowner’s insurance, business insurance, and watercraft insurance are necessary because it provides a base of security and protection. Umbrella insurance delivers coverage exceeding the limits of your other insurance policies. Homeowner’s coverage can get very expensive quickly by increasing the liability limits. Auto insurance with 1 million dollars of “Bodily Injury” (BI) can triple the cost of your policy. Unless you have a houseboat increasing the liability coverage on a watercraft is prohibitive. Plus, the simple fact is not all liability claims are covered.
Umbrella insurance is extending the coverage of your base insurance and only after the base insurance limits are exhausted has the coverages “kick in,” although generally provides liability coverage for:
Injuries to other persons
A limited and specific set of lawsuits
Personal liability situations
Let’s face facts, every time you invite someone into your home, you increase your liability. Every time you drive your auto, watercraft, or RV, you increase your liability. When you are liable to someone, your primary insurance policies pay up to their limits. Still, you or your umbrella policy will pay all additional settlement or judgment amounts (up to the limit of the umbrella policy).
Bodily injury liability will cover the cost of medical bills, liability claims caused by you.
A severe auto accident where you’re found at fault.
The harm caused to others and their property by your dog*
Your houseguest is injured in your home.
A person is hurt while playing in your yard.
Property damage liability covers the damages or loss of another person’s property.
Damage to vehicles and other property due to an auto accident, but only if you are at fault.
Owners of rental units are protected as a landlord.
Your sidewalk has a crack, fix it or risk being sued for someone claiming injuries.
It’s your tenant’s dog* but you can be held responsible for the damages.
Additional coverage is provided if you’re sued
Slander: Facebook, YouTube, Tictok are all ways to injury another party with your spoken words or statement.
Libel: Putting something in writing that harms or injures a person.
False arrest, detention, or imprisonment.
Legal defense costs if you are involved with a lawsuit.
Defamation of character.
Invasion of privacy
Liabilities that happened outside the United States.
If you injure yourself in your own home or damage your property.
There is no insurance protection if you commit a criminal or deliberately cause damage to someone else.
Any liability you assume under a contract between you and another.
The total value of your assets, including checking and savings accounts,
Your retirement and college savings and investment accounts.In addition, your home equity. If the above amount is greater than the limits of your auto or homeowner’s liability limits, then an umbrella is a good option. Our thinking behind this advice is to have enough coverage to protect your assets fully so you can’t lose them in a lawsuit. Although, this recommendation makes no sense because jury awards can easily exceed insurance policy limits. The real question you must ask yourself is, what is the risk of being sued? The answer; Everyone, so umbrella insurance makes perfect sense for everyone. It can be a small price to pay for the extra protection and peace of mind. Some are more likely to need an umbrella policy than others and not even know it. Are you engage in some activities with more significant risk than others, then you’re an even better candidate for an umbrella policy. Owning property, renting it out, employing household staff, having a trampoline or hot tub, do you have large parties or are you a well-known public figure. How about a simple thing like having a teenage driver, owning a dog, or a swimming pool. Basically, the more stuff you have, the more likely you will be sued, and the more firmly we ask you to consider purchasing umbrella insurance. But anyone who is risk-averse can sleep better knowing an umbrella policy protects them.
Even the most cautious person with the finest intentions can end up responsible for a massive judgment from a personal liability lawsuit. While you’re doubtful about finding yourself in this situation, it’s still wise to protect yourself against such a devastating financial loss. Umbrella insurance can help you do that.