Most standard personal insurance policies (e.g., auto, homeowners and boat insurance) offer liability coverage. This coverage protects you (the policyholder) and other covered parties if you’re found to be legally responsible for injuring someone, damaging their property or causing other types of personal harm. It can pay for these costs up to your policy limit. If these costs exceed your policy limit, you may have to pay the additional expenses out of your own pocket—unless you have a personal umbrella insurance policy.
Understanding Personal Umbrella Insurance
Personal umbrella insurance provides extra protection over the limits of standard liability coverage included in various personal insurance policies you may have (e.g., a homeowners, auto or renters policy). Suppose a claim arises that exceeds the limit on your liability policy. While the policy will pay up to its limits, you could have to pay the remaining costs out of pocket. If you have an umbrella policy, however, it will cover costs above those covered by your standard liability policy.
The Benefits of Getting Personal Umbrella Coverage
Because of the additional assistance the policy can provide, Jack Lee Fong Insurance strongly recommends that every client add umbrella coverage to their insurance portfolio. Listed below are some of the perks of having a personal umbrella policy.
Umbrella Insurance Helps Cover Settlements and Legal Costs
Often, liability insurance claims arise following lawsuits. For example, suppose you cause a car accident and the passengers in the car you hit suffered serious injuries. You are found at fault for the accident and the passengers sue you. Ultimately, you’re ordered to pay the injured parties for medical expenses and lost wages. These costs could far exceed the liability limit on your auto insurance policy. That’s where your umbrella policy would kick in. It can provide additional funds for the settlement and legal costs incurred—up to a certain limit.
Umbrella Coverage Can Apply to Multiple Policies and Liabilities
You may need only one umbrella policy to add extra coverage to your auto, homeowners, RV, motorcycle, boat and other personal insurance policies. Therefore, with one umbrella policy, you may be able to gain substantially expanded liability coverage for multiple existing personal policies. This can often be cost-effective since you may not have to buy multiple umbrella plans across multiple policies.
Plus, some umbrella plans cover liabilities that your standard liability coverage may exclude. Suppose, for example, that your standard homeowners liability plan doesn’t cover dog bites. In that case, you may still be able to turn to your umbrella coverage for assistance.
Umbrella Coverage Can Provide Peace of Mind
By having an umbrella policy, you’ll know that you have substantially more coverage just in case a high liability claim arises. While a standard liability insurance policy can provide high coverage limits on its own, there is no guarantee that a claim will stay within those limits. If you engage in high-risk activities or hobbies, such as having a teenage driver, owning a pool or entertaining often, it might be wise to have the extra protection umbrella insurance provides.
Many umbrella policies can provide at least $1 million in additional liability coverage. The cost of an umbrella policy is usually very affordable and easily integrated into your budget.
To learn more about how a personal umbrella insurance policy can benefit you, contact Jack Lee Fong Insurance today.