Personal umbrella insurance offers a safety net against one very specific risk: a large claim. Personal umbrella extends the limits of your existing personal insurance policies, so you don’t have to worry if one single incident comes with one very large price tag.
What is Umbrella Insurance?
Umbrella insurance is there to protect you from the risks of an insurance claim which may be larger than limits of your homeowner's insurance and auto insurance policies by offering additional coverage or “excess liability.” A personal umbrella policy provides coverage when the limits of an underlying liability policy is exhausted.
If something really bad happens, the standard liability limits in homeowners or auto policy is typically not enough. Most states have financial responsibility laws that hold drivers accountable for bodily injury and property damage that result from car accidents, and the at fault driver an be sued for the damage. Similar laws are also in force for home and watercraft owners. Personal assets from the at fault driver can be seized resulting from a lawsuit.
Beyond liability, umbrella insurance will also provide protection against things such as libel, slander, defamation of character, false arrest, or invasion of privacy.
What is Liability Insurance Again?
Liability insurance is the portion of a personal insurance policy that covers expenses related to personal injury, property damage, and even lost wages due to the negligence if you are found at fault. Liability also covers legal defense if you end up in court due to your negligence. Often required by law, liability insurance can protect you from high costs when you’re responsible - even if you’re sued. Below are a few examples of costs liability insurance may cover:
Medical bills from personal injuries
Lost wages due to negligence
How Does Umbrella Insurance Work?
Let’s say you were at fault in an auto accident which resulted in severe injuries to another driver. In this example, your auto policy limits cover $250,000 for the incident. But the driver’s injuries resulted in medical bills higher than your policy limit covers. In addition, he is unable to return to a high paying job as a result of his injuries, and now wants to sue you for lost income and the remainder of his medical expenses.
Without umbrella coverage, you could be personally responsible for hundreds of thousands of dollars as a result of this accident.
When you have umbrella insurance, the coverage kicks in when you have reached the limit of your underlying policy. In the example above, your umbrella insurance would cover the difference between your auto insurance policy limits and the remaining claim amount, including the cost of a lawsuit.
With limits starting at $1 million, and available in $1 million increments from there, umbrella coverage provides a large safety net against the risk of a high dollar claim.
Who Needs Umbrella Insurance?
Many people mistakenly believe that umbrella coverage only benefits those who are wealthy and have a lot to lose. That’s not the case. The reality is that most people don’t have the reserves available if they were faced with a claim amount where they were responsible for up to a million or more.
Which is why umbrella insurance can benefit almost everyone, no matter what their income or assets look like.
The value of your assets and the risks you may face are an important consideration when determining how much umbrella coverage you should carry. The more assets you have to protect, the higher the umbrella policy limit you may want to consider carrying.
For one affordable monthly premium, you can extend the limits of your personal insurance policies and ensure you won’t be left holding a bill you can’t handle in the event of a large claim.
Get Personal Umbrella Insurance Today
Bodenstein Insurance offers umbrella insurance to fit your budget, so you can get the right amount of coverage you need at a price you can afford. Call us today at (775) 782-3030 to speak to a personal umbrella insurance expert about the best coverage options for you and your family.