How An Umbrella Insurance Policy Works
How An Umbrella Insurance Policy Works: Umbrella insurance is additional protection that extends beyond the limitations and coverages of other policies. Coverage for injuries, property damage, some litigation, and personal responsibility scenarios can be provided through umbrella insurance.
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How does an umbrella insurance policy work?
In two significant ways, an umbrella insurance policy protects your possessions and your future.
- When the coverage limits of your house, auto, and boat insurance policies are exhausted, umbrella insurance may provide additional protection.
- Umbrella insurance provides coverage for claims that may be prohibited by other liability policies, such as false arrest, libel, and slander claims, as well as liability coverage for rental properties you own.
What does umbrella insurance cover?
Umbrella insurance provides coverage that extends beyond the limitations of your other insurance policies or for claims that may not be covered by your liability policies. Typically, umbrella insurance provides liability coverage for:
- Damage to property
- Certain lawsuits
- Personal liability situations
Who needs umbrella insurance?
My auto and home insurance cover a portion of these circumstances.” True! But, umbrella insurance protects you beyond the boundaries of these policies and provides coverage for scenarios not covered by other plans. Contact us today at (866) 272-5192 for a quote on umbrella insurance – the rates are more affordable than you think!
Umbrella Policy Coverage Examples:
The bodily injury liability covers injuries caused by an accident to a third party. Examples include medical expenses and/or liability claims resulting from accidents caused by:
- A severe automobile collision in which you were at fault.
- Damage perpetrated by your dog to others.
- A guest in your home is injured.
- A neighbor’s child collapses in your yard while playing.
Property damage responsibility covers the expense of damage or loss to the tangible property of a third party. Examples include damage to autos and other property caused by a car accident for which you are responsible.
The owners of rental properties insulate landlords from potential responsibility. Examples include the price of liability claims resulting from:
- Someone suing you for damages after tripping over a crack in the sidewalk of your rental property.
- Your tenant’s dog biting someone and holding you liable for the resulting harm.
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?
Typically, an umbrella policy excludes coverage for:
- your injuries and property damage are covered.
- Unlawful or purposeful conduct that causes harm to another person.
- contract-related obligations you assume.
How can umbrella insurance help protect you?
Let’s examine an illustration to help you comprehend how umbrella coverage would protect you. If you create a car accident and the injuries you inflict on others cost $500,000 to treat. And assume that the bodily injury liability limitations on your motor insurance policy are $300,000. Your motor insurance policy will cover $300,000 of the damages. Who will be responsible for the remaining $200,000?
Your umbrella insurance policy will. It will cover the amount in excess of your auto policy’s limit, up to the limit you select for umbrella coverage.
Here’s a breakdown of overall cost, situations in which your auto insurance limits may be surpassed, and how umbrella insurance might protect you:
|Total Cost of Car Accident||$500,000|
|Auto Insurance: Bodily Injury Limit||$300,000|
Frequently Asked Questions
How much does umbrella insurance cost?
The price of an umbrella policy relies in part on the amount of coverage purchased. Other variables, such as your location, the number and types of vehicles you possess, and the number of homes you own, can affect the rates for umbrella insurance. Our umbrella insurance agents can assist you in acquiring coverage that meets your requirements.
What does my umbrella policy cover?
When the costs of a covered claim surpass the limits of your homeowner’s or auto insurance policy, umbrella insurance can assist protect you from the financial burden. When you are sued for damages to someone else’s property or injuries caused by an accident, an umbrella policy can help cover your defence expenses.