Liability insurance coverage can protect you from financial difficulty when common accidents, mishaps, or damage happens. As beneficial as it can be, liability insurance has coverage limits, both in how much it pays out and what incidents it covers. That’s why insurance providers often offer umbrella insurance on top of their standard liability policies.
What is umbrella insurance? It’s supplemental coverage for major damages and substantial losses above and beyond the limits of your primary standard home, auto, or liability policy. If a person is found liable for injury, physical damage, or other significant losses, umbrella insurance can keep you from experiencing financial free-fall.
How Umbrella Insurance Works
In typical home and auto policies, insurance services establish limits in two ways. One is setting cash limits — the maximum amount an insurance company will pay out to settle claims.
Even if the coverage limit might seem generous — into six-figure amounts — that sum can get spent pretty quickly on medical bills, legal fees, repairs, and replacement.
A standard insurance policy may also exclude certain types of claims, creating gaps in coverage. These exclusions could include intentional damage, business activities, severe auto accidents, defamation, damage to high-value items and property, emotional distress, and other kinds of claims.
Umbrella insurance gives the policyholder more layers of protection alongside the standard policy. It can help defray the costs of excess coverage and close up coverage gaps. Umbrella insurance coverage limits often start at $1 million and can get up to $10 million.
In a claim, after the coverage provided by a standard liability policy reaches its payout limit, umbrella insurance kicks in and covers the excess. Despite the large payouts umbrella insurance addresses, its monthly premium payments are usually lower than regular insurance.
Incidents Commonly Covered by Umbrella Insurance
What situations can umbrella insurance cover? Here are a few:
- Personal liability in a severe car crash
- When a guest slips and falls on your property
- Injuries incurred when your dog bites someone
- Claims for libel or slander
- Damages and injuries caused by your teenage child’s actions
- Costs from cyber liability, like a data breach or online defamation
- Expenses for emotional distress on others as a result of your actions
These are just a few of the common costs and situations umbrella insurance can cover. It can provide some assurance that you won’t face financial despair in the event of a large claim against you.
Who Might Benefit From Umbrella Insurance?
What kinds of people might consider umbrella insurance? A fairly wide range: high-net-worth individuals, parents of teenagers who just started driving, frequent travelers, rental property owners, small business owners, people who participate in high-risk events like skiing or boating, event hosts and managers, and many more.
Umbrella insurance can defray the costs of large-scale, unexpected damages in several unique situations.
Get Comprehensive Umbrella Insurance From Warrior Insurance & Services Group
Warrior Insurance & Services Group protects hard-working individuals and families from some of the most difficult expenses associated with accidents and other events. Contact us online to request a quote.
