Personal Umbrella Insurance

when it rains, it pours

The types of everyday insurance policies that many people have, like Auto Insurance or Homeowner’s Insurance, can go a long way toward shielding your finances against liability claims. These policies are naturally limited, of course, by their particular coverage limit, which can leave you vulnerable in the event a particularly devastating lawsuit goes beyond that limit. A Personal Umbrella Policy is a relatively low-cost way to add another layer of protection against this worst-case scenario. 

What is Personal Umbrella Insurance?

Personal Umbrella Insurance is a type of liability insurance that backs up your existing home and auto policies in the event a claim goes beyond those policies’ coverage limits. Let’s say one day your neighbor comes by to say hello and your dog returns the favor with a bite. The neighbor is seriously injured, and between medical bills, rehabilitation, and time away from work, Fido’s peculiar way of saying “hi” adds up to a claim of $650,000. If you have $500,000 in personal liability coverage from your homeowner’s policy, an Umbrella policy would take care of the remaining $150,000. 

Do I Need Personal Umbrella Insurance?

A general rule of thumb is that if the total value of your assets is greater than the coverage limits of your auto or homeowner’s policy, then you should consider Personal Umbrella insurance to bridge that gap. Another factor to take into consideration is your potential for a liability claim in the first place. Owning a pool or a trampoline, throwing large parties, employing household staff, and being a public figure are all examples of risk factors for a personal liability claim. Generally speaking, the more likely you are to be sued, the better the case there is for carrying a Personal Umbrella policy. 

What Does Personal Umbrella Insurance Cover?

Besides simply increasing the liability coverage of your existing Home and Auto policies, Personal Umbrella insurance can broaden that protection as well. For instance, most homeowner’s policies do not cover liability for libel or defamation of character, but an Umbrella coverage generally will. An Umbrella policy can also help cover:

  • Damage to other people’s property
  • For landlords, tenant injuries or damage
  • Legal fees
  • Injury to others
While Umbrella Insurance policies can cover many risks, no insurance policy covers everything.

What Do Umbrella Insurance Policies Not Cover?

  • Damage or injury that you cause on purpose. 
  • Liability from business activities. For that, you’d need General Liability coverage for your business. 
  • Liabilities that you’ve agreed to assume under a contract. 
  • Damage from war, or armed conflicts.
  • Damage to your own property. Umbrella policies are liability insurance, so they generally only cover damage to other people’s property. 

What Does Personal Umbrella Insurance Cost?

As with any insurance policy, costs can vary depending on your location, how much coverage you purchase, and the amount of risk (in the form of homes, cars, etc.) you have. Generally speaking, a $1 million Umbrella Insurance policy costs between $150 and $300 per year, with the cost increasing for each $1 million in added coverage. Keep in mind that many policies require that the auto and home insurance you already have are at the maximum coverage level offered. 

Ready to get started with Umbrella Insurance or want to learn more? Talk to our agents today to find the coverage that works for you!

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