Umbrella Insurance: What Is It?
In general, umbrella insurance provides extra liability coverage. It helps safeguard the future and your assets by preventing major claims and lawsuits. This is accomplished in two ways:
1. Increases your liability insurance coverage beyond the limits of your homeowners, auto, and boat policies. In short, the liability on these other policies will be exhausted before this protection kicks in.
2. Liability coverage for things that other policies may exclude, such as false arrest, slander, and libel.
You might think your homeowners and auto insurance should cover these situations, and in some cases, that is true. The umbrella policy, however, provides coverage beyond the boundaries of the other policies. The umbrella policy can also offer coverage for situations that are not normally covered by other insurance policies.
Trying to figure out if you’re properly covered? Ensure you are familiar with key risk areas and whether additional coverage is necessary.
Umbrella Insurance Covers What?
Liabilities For Bodily Injury: Provide compensation for bodily injuries. These costs include the cost of medical bills as well as liability claims.
Insurance Coverage For Property Damage: Property insurance provides protection for the loss of or damage to tangible property of another person.
Those Who Own Rental Properties: Ensure that you’re protected from liability risks as a landlord.
A Legal Umbrella Policy Will Also Protect You In The Following Situations:
Under Umbrella Insurance, What's Not Covered?
If you are injured or if you damage your property, umbrella insurance does not cover the cost of that. You’ll need separate coverage for those things (such as health insurance and collision coverage). If you do not have a commercial umbrella policy, it will not cover liability associated with your business.
An umbrella policy typically isn’t covered for liabilities related to breaches of contracts. Suppose a roofing company sues you for not paying the amount owed for work done under the contract you signed. Your umbrella insurance policy likely won’t cover the cost of that action. If you commit a crime or deliberately hurt someone, you’re probably not covered.
The exclusion of boats is another common example. Certain companies only offer coverage for certain types of boats, while many don’t cover any watercraft unless you have an existing boat insurance policy.