In today's litigious society it is important to have your assets properly covered by insurance. If you cause harm beyond your insurance limits for say a car accident, you do not want your house, land, boat, motorcycle or any of your important property to be at risk. If you were to be sued and received a judgment against you, these assets could be at jeopardy so it is crucial to have enough insurance to cover your legal liability.
To cover your legal responsibilities, a personal umbrella liability insurance policy can help protect you. An umbrella policy is supplemental coverage to be added onto the auto and home insurance that you already carry. There are misconceptions that umbrella policies are only for the wealthy but they are not. Any person or family that has assets to lose can obtain a policy to protect their property.
Without proper liability insurance to cover a claim or lawsuit, a judgment against you could allow the courts or person taking the action, to go after your personal assets such as your home. Umbrella insurance protects you by covering damage claims that you and your dependents may cause. If you own a pet, such as a dog that gets loose from time to time, in many cases their actions would also be covered under an umbrella policy.
Umbrella coverage is not your first form of defense against actions placed upon you. Your motor vehicle insurance and homeowners, depending upon how and where the damages where caused, are your first line of insurance coverage; if their limits are exceeded your umbrella policy would kick in.
Your umbrella policy would start where your other liability insurance ends. So if an action or judgment against you was for $800,000 and your homeowner's liability only covered you up to $400,000, the umbrella policy would pay the claim above the $400k up to the limit of your umbrella policy. Without the umbrella policy you would need to find the extra $400,000 on your own to pay the judgment.
Umbrella coverage may not cost as much as one would think. This is due to the fact it does not assume risk until after your primary insurance policy, being homeowner's or auto, is exhausted. The pricing of umbrella coverage can vary but in many areas of the nation you can buy a $1 million umbrella liability policy for around a $200 to $300 annual premium.
To find out what your umbrella policy will cover, you will have to read through the terms of the policy that you buy. Generally though buying a personal liability umbrella policy from an insurance company allows you coverage if you cause property damage, bodily injury or personal injury.
The personal injury protection may include coverage for things such as: malicious prosecution, invasion of privacy, eviction and defamation. Most primary insurance policies include bodily injury and property damage coverages but not personal injury that an Umbrella policy will. Also, if you work or serve on a board of some type (religious, charity, or otherwise) check with the provider of the umbrella policy to see if it would cover you if you face liability from actions take while on the board, many will.
Umbrella policies are a lot like the product they are named after. They can provide you a lot of shelter from a storm but you still may get wet. This means that even if you get a high end personal liability umbrella policy, it cannot protect you and your dependents against every potential lawsuit or claim against you.
As with your primary insurance policies, an umbrella policy will have exclusions. Go over these exclusions with your agent when buying the policy and then read the policy thoroughly once you get home. If you have a business policy, you will need to get a business policy and not expect your personal umbrella policy to cover you, because in all likelihood it will not protect you for business activities.
Umbrella policies usually will not pay for intentional actions. For instance, if a person slips and falls on your property that would be covered but if instead you purposely tripped the person with the intention of causing harm, your insurance coverages would not likely cover it. Also if a judgment against you includes punitive damages, those will not usually be paid by an umbrella policy since these damages are typically awarded for a person's bad behavior.
To know the exact parameters and limits to your primary and umbrella policies, read through the policy. If you move or change states and have to change policies, read through the new one as well. State laws differ so the policy in a different state is likely to have differences due to state regulations.
To decide if your current situation requires a personal umbrella liability policy, take into account what accidents or incidents could occur with your car or at your house. If you have a trampoline or pool there are more liability risks than if you have a simple grass backyard. If you drive many miles weekly or drive aggressively than there is more risk of an accident occurring.
You can purchase an Umbrella policy through CarInsurance.com. Typically, it will be purchased on top of your auto policy for supplemental coverage. Check over your current limits on your auto insurance and homeowners. You might decide that raising those limits would suffice and cost less than the umbrella policy. If you decide that you have a lot of assets and could be at risk and need the extra protection, find an umbrella policy to cover you and your dependents so that you feel safe and secure.