An umbrella insurance policy extends beyond the limits of your standard insurance policies to give you excess coverage over and above what is offered by the other liability policies. This policy is especially useful if you have valuable assets that you might lose in a lawsuit. An umbrella insurance policy protects you and your assets by covering you for excessive damages, thus ensuring that you don’t have to pay for them out of pocket.
Examples of Situations Where an Umbrella Policy May Prove to be Crucial
- Your dog bites someone
Though such incidents are normally covered by your standard home insurance, medical bills and damages that exceed your home insurance limits will be covered by the umbrella policy.
- You or your loved ones injure someone else
Suppose your son throws a ball at your neighbor or you accidentally injure a visitor to your house, umbrella insurance will cover you for damages that exceed your standard liability policies.
- You are involved in a serious auto accident
Once you have exhausted the limits of your auto insurance policy, your umbrella insurance will kick in to cover the excesses.
These are just a few examples of when your umbrella insurance may cover you. Note that this policy is not a stand-alone policy, and it kicks in only after you have exhausted the limits of other standard insurance coverages.
There are times when your umbrella insurance will cover you for instances that are not even covered by your standard policy, such as:
- Libel, defamation, or slander
- False arrest, detention or imprisonment
- Wrongful eviction from property
- Invasion of privacy
What Is Not Covered by Umbrella Insurance?
The following are a few instances that will not be covered by your personal umbrella insurance.
- Business losses
- Breach of written or oral contracts
- Intentional criminal acts
- Damages due to nuclear radiation, wars, or terrorism
Do You Really Need Umbrella Insurance?
If you are exposed to a higher risk of potential lawsuits, having an umbrella policy will protect you and your resources from the financially damaging effects of such lawsuits. The following are a few instances in which having an umbrella insurance policy will prove to be beneficial for you:
- You are a well recognized public figure
- You have several household staff
- You have a swimming pool or a trampoline at your home
- You have dangerous breeds of dogs, horses, or other large animals
- You often host large parties at your home
- You are the board member of a charitable organization
How Much Umbrella Insurance Coverage Do You Need?
This will depend on the value of the assets to be covered and the possibility of future income loss. The higher the value of your assets and the greater the possibility of income loss, the more will be the coverage required.
At CF&P Insurance Brokers, our team of experts can help you evaluate your coverage needs and create customized policies that cover you and your assets from future uncertainties. Contact us today to get started!