Umbrella insurance is like having extra coverage for a rainy day. Think of it as an extension of your home and auto policies to provide for liability claims that can come up. Even though it goes above and beyond the basic limits, you never know when you might need it. Plus, since you’re adding the umbrella to an existing policy, this coverage is less expensive than stand-alone liability protection. To help you better understand what’s included, we’ll breakdown some of the specifics today.
On the Auto Side
For your average car accident, your regular auto insurance will cover the damages just fine. In a simple fender bender, you can repair your car and the other(s) involved with only a small portion (the deductible) paid out of pocket. In the event of a bigger accident, though, you may hit your liability limit. This includes damage not just to the other cars, but also the healthcare costs of all individuals in the vehicle, as well as their lost wages. So, imagine having to pay several hundred thousand dollars’ worth of medical expenses, plus the cost of replacing their paycheck(s) while they’re in recovery. Most auto policies cover the first $250,000, but after that you’re on your own. In the event of a million-dollar lawsuit, you could be responsible for paying the remaining $750,000 out of pocket. Unless you have an umbrella policy. Plus, it covers expenses ordinarily excluded from auto coverage, such as work-related vehicular accidents or driving another person’s car.
An umbrella policy also extends your homeowners insurance to cover incidences where guests or passersby are injured on your property. That way, if your neighbor slips and falls on your sidewalk or your dog gets loose and accidentally bites someone, you’re protected. When it comes to lawsuits, this type of insurance can also be used to cover court costs and other legal fees. Even if it’s not necessarily something that happened at home. For example, this coverage applies to liability resulting from defamation like libel or slander. It can also cover damages to vacation rentals, friends’ houses (that you or your family have caused), and pet-related problems that occur offsite.
Acts that would normally be excluded from homeowner’s insurance, such as grand theft and/or vandalism, can also activate this type of policy. While it won’t act as a replacement for business insurance if you’re operating a home-based business, it’s recommended for homeowners who also act as landlords. With rental properties, you’re exposed to much higher levels of liability. So, while most people opt for the $1 million-dollar standard, you may want to purchase extra coverage. Typically, these policies are sold in million-dollar increments, but the cost only minimally increases your annual premium.
For more information on how to bundle umbrella coverage in with your current homeowners and/or auto policies, call Freedom Insurance Agency today! We’re happy to provide you with quotes from multiple carriers, even if you’re not currently a client. Our primary concern is ensuring you’re protected from all the examples we mentioned today—and more. See how we can shield all your assets under one umbrella, with a little help from some of the top names in insurance today.