Umbrella insurance is an important coverage
Your homeowners insurance covers more than just your home, offering you personal liability coverage for a number of hazards, including dog bites and falls. But it doesn’t cover everything that could go wrong, and most homeowners policies have coverage limits that could fall short if you get sued and are hit with a judgment. The same goes for car insurance. To protect yourself from financial ruin should such a situation arise that’s not covered fully by your home or auto insurance, it’s important to protect yourself by carrying umbrella insurance.
What is it?
An umbrella policy is a type of insurance that helps to protect you against large liability claims. It does this by both extending coverage beyond the limits in your homeowners or other insurance policies as well as covering events that might be excluded from those policies.
Who is it for?
An umbrella policy is a good idea for anyone, but it is an important coverage for people who have assets that could be at risk in a lawsuit. This includes homeowners and people who have large assets that are outside of a protected account such as a 401(k).
How does it work?
An umbrella policy is a type of supplemental liability policy, meaning it only kicks in if other insurance has been exhausted or the event is something that is excluded from another policy. Once a claim is either rejected by your insurer or the policy limit is reached, then you can submit a claim to your umbrella insurer.
Umbrella insurance policies are all very similar, although they may vary in what they cover. Most policies cover injuries, property damage and personal liability. The personal liability coverage may include coverage for lawsuits alleging slander, libel or other non-injury situations.
The main benefit to carrying an umbrella policy is the additional coverage it provides above and beyond your other liability insurance policies. This helps to ensure that you will not be on the hook financially for judgments against you that exceed limits from or aren’t covered by your home, auto or other insurance policies.