Most insurance policies have coverage limits that detail the greatest cost that insurance might pay for a claim. Local law might mandate minimum coverage levels, but policyholders usually have the option to increase those levels to meet their needs. Your insurance agent can help you choose the correct levels. 
If you go beyond these coverage limits, you’ll most likely have to pay out of pocket — unless you have a personal umbrella insurance policy.
Understanding Standard Insurance Coverage
Let’s say your personal injury liability coverage on your homeowners insurance is $500,000. If someone gets hurt on your property, they might request help paying for medical treatment. You might compensate that person with up to $500,000 from your insurance to help them meet medical needs.
But what would happen if an injured party was to request $1 million in injury compensation? How would you pay for the extra $500,000 of costs?
Personal umbrella coverage can help cover this sum.
What is Personal Umbrella Insurance?
Think about how an umbrella works. It provides an extra layer of overhead protection to shield you from pouring rain or the blazing summer sun. You can think of umbrella insurance in the same way.
Personal umbrella insurance is extra liability coverage. It can protect you from risks that exceed the limits of your standard insurance policy.
If a standard insurance claim exceeds your coverage levels, you might be able to tap into umbrella insurance to cover the full cost of the claim.
Furthermore, umbrella insurance might cover damages that standard policies do not cover. If your policy lists exclusions or named coverage, you might use umbrella insurance to cover extra risks.
What Does Personal Umbrella Insurance Cover?
As a general rule, umbrella coverage can cover a wide variety of liabilities. These may include extra coverage for risks in your standard policies. They may also cover extra risks outside your regular coverage.
Umbrella insurance may cover you in cases of:
- Bodily injury
- Property damage
- Injuries caused by animals
- Slander, libel or other spoken or written risks
If you have a specific risk that concerns you, you should talk to your insurance agent. He or she can advise you how best to protect those liabilities on your umbrella insurance policy.
Keep in mind, umbrella insurance does not include unlimited coverage. To best utilize your assets, focus first on your standard insurance policy. Buy enough coverage on the standard policy to reasonably cover your potential risks. That way, you can reduce the chances of exceeding your standard policy limits.
You’ll likely have to exceed all coverage of your standard insurance policy before making a claim on your umbrella policy. Make sure you balance your standard insurance with the right coverage levels. This way, you can safeguard your umbrella policy for later use. However, don’t buy standard levels that are so high that you waste money on insurance coverage you don’t reasonably need.
Jack Lee Fong Insurance Agency, Inc. can help you get coverage to meet your needs. Call us at 415-956-3990 for a free Houston personal umbrella insurance quote.