What is Umbrella Insurance Policy
Umbrella Insurance Policy is a low-cost way to get significant extra liability coverage. Chances are slim that you will lose a lawsuit greater than what your existing insurance will pay but if you find yourself in this situation you could lose everything.
Umbrella Insurance Policy is designed that you never find yourself in that situation.
In this article, we give you a rundown of what an umbrella Insurance Policy is, what it covers, and the advantages of having the coverage.
What is Umbrella Insurance?
Umbrella Insurance is a type of personal liability insurance that can be indispensable when you find yourself liable for a claim larger than your homeowner`s insurance or auto insurance will cover. If you own a boat, umbrella Insurance will also pick up where your watercraft`s liability insurance leaves off.
Umbrella Insurance also covers certain liability claims, those policies may not, such as libel, slander, false imprisonment. And if you own rental property, umbrella Insurance provides liability coverage beyond what your renter`s policy cover.
- Basically, Umbrella Insurance is a type of personal liability Insurance that covers claims in excess of regular homeowners, auto or watercraft policy.
- Umbrella Insurance covers not just the policy holder but the household name.
- Umbrella Insurance covers injury to others or damage to their possessions. It doesn`t protects the policy holder property.
- Umbrella Insurance is cheap compared to other insurance policy.
How does an Umbrella Insurance Policy work?
Just Incase your homeowner`s insurance or auto insurance is not enough, then this is what umbrella Insurance can do for you
- Your dog runs out from your house and attacks your neighbor who was going for a walk, then your neighbor Sues you to court to cover his medical bills and his pains and sufferings.
- Your son gets into a fight in school with another boy and breaks his nose in the process. The boy`s parents sue you.
- You send sandwiches to your son`s school for a field trip lunch and several students develop food poisoning and their parents sue you.
- Your son throws a party when you are out of town and then one of the guests brings alcohol to the party. Then one of the attendees is arrested for driving under influence. You are sued.
- Your teenager drives your car and gets some people injured in the process and you are sued.
Do you need Umbrella Insurance?
Umbrella Insurance might be key because of the kind of world we live in. These days anyone and everyone can sue you for the smallest of matters to the biggest things.
We have seen in the use many times where one will have to pay huge sums to others because the judge passed his verdict that way.
But sometimes you might ask yourself will I ever be in that situation, well no one knows.
It`s common to hear that you should purchase umbrella Insurance if the total value of your assets, including ordinary checking and savings accounts, retirement and college, savings and investment accounts, and home equity is greater than the limits of your homeowner`s or auto liability.
In the end, all we are trying to say is purchase umbrella Insurance cause everyone is liable to be sued.
Some people may need the purchase of the umbrella Insurance more than others cause they are at a higher risk of getting sued.
- Owning property
- Renting it out
- Employing household staffs
- Having a trampoline or hot tub
- Hosting large parties
- Being a public figure
- Having a teenage driver
- Owning a dog
- Owning a house with a swimming pool in it
You getting an umbrella insurance policy if you fall into one of the above categories should be a priority.
What doesn`t umbrella Insurance cover?
Unfortunately, no insurance policy covers everything. Although umbrella Insurance covers more areas, it still can`t cover everything. So here are some areas it doesn`t cover.
1. Damage to your property
Remember it is personal liability insurance i.e it only covers the damage to other people`s property and not yours. So do well to get a homeowner`s insurance policy.
2. Damage that you or your household member cause on purpose
If you deliberately commit a crime, then I`m sorry umbrella Insurance has no business with that.
3. Liability incurred in business or professional activities
You will really need a business insurance policy to cover this one.
4. Liability related to war or armed conflicts
There is no insurance policy that covers this one cause the damage caused by war is usually huge and no Insurance policy can afford that.
5. The liability you agreed to assume under a contract you signed
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