You already have liability insurance through your home and auto insurance – maybe even your boat, RV, or ATV insurance, too. Even with the maximum coverage limits on those policies, however, you may still be financially vulnerable if you are hit with a major lawsuit. Umbrella insurance provides an extra layer of protection on top of the liability coverage you already have to help fill in the gaps left behind by your home, renters, auto, and other insurance policies.
We’ve all heard horror stories of people losing everything they have in major court cases. Perhaps you assume that only the wealthy are hit with lawsuits or that you have little to lose in court. The truth is that anyone in the litigious society we live in can find themselves responsible for a third-party’s losses. If that loss exceeds the limits on your liability insurance, your life savings, personal assets, and even future income could be at risk – unless you have umbrella insurance.
Umbrella Insurance: What’s Covered?
Umbrella insurance is high-value liability coverage designed to protect policy-holders from financially devastating court judgments. It is provided as a supplement to other types of liability insurance and typically sold at an affordable, budget-friendly price. In most cases, umbrella insurance includes:
- A minimum of $1 million in extra liability coverage
- Additional protection available in $1 million increments up to $5 million
- Automatic coverage when the limits on another liability policy have been met
Imagine being the cause of a multi-car pile-up on Interstate 90. The accident results in major property damage to several vehicles, as well as multiple injuries and one fatality. The $500,000 maximum auto insurance liability you once thought was enough is now only a fraction of the total financial liability you are being sued for. If you have umbrella insurance, it can provide an extra $1 million or more above and beyond the coverage on your auto insurance. Without it, you could find yourself somehow paying much of the debt out of your own pocket.
A standard umbrella insurance policy extends the coverage on your existing insurance for:
- Bodily injury liability
- Accidental death liability
- Personal injury liability
- Property damage liability
Do You Need Umbrella Insurance?
Umbrella insurance can provide important protection to anyone who has significant assets or future income to protect. This is especially true for people at an increased risk of liability, such as those who own swimming pools, trampolines, treehouses, aggressive animals, and other possessions that could result in harm to another person. You may also wish to consider umbrella insurance if you have a newly licensed driver in your household, as teenagers are at the highest risk of accidents during the first few years behind the wheel.
If you are not sure if you could benefit from umbrella insurance, we here at Gary Ellis Insurance can work with you to evaluate your coverage needs. We can help you assess the value of any assets that might be at risk in a lawsuit, such as the equity in your home, your personal savings, money earmarked for a child’s college education, cash put aside for retirement, and non-essential physical assets, such as a second car or boat. Consider, also, that umbrella insurance can provide additional liability protection not available through other types of policies. This typically includes coverage for slander, libel, false arrest, landlord liability, and liability when traveling overseas.