Unfortunately, accidents happen — and it’s not uncommon for out-of court settlements to run into the millions of dollars. While it’s difficult to pinpoint the monetary consequences of the risks you and your family take each day, are you certain your current liability insurance offers you enough protection?
Like an umbrella that protects you from the rain, a personal umbrella liability policy provides an extra layer of insurance coverage over your standard liability policies. It protects your personal assets by kicking in when your standard liability coverage is exhausted.
What is an umbrella insurance policy?
An umbrella insurance policy allows you to extend your third party liability beyond the limits in your existing home and car insurance policies. In addition to providing excess third-party liability coverage, an umbrella policy may also provide additional coverages that aren’t already included in your home or car insurance policy (e.g., protection in the event of false arrest, slander, or an invasion of your right to privacy).
How does umbrella coverage work?
If you are found to be legally responsible for injuring someone or damaging their property, without a personal umbrella liability insurance policy, anything beyond the limits of your standard liability insurance coverage will come out of your own pocket. In the event that you’re sued, you’ll count on your home or auto liability coverage to cover the costs associated with the lawsuit. But lawsuits can be really expensive, and if your liability claim exceeds the limit in your standard home or car insurance policy, you’ll be responsible for paying the remaining balance — if you don’t have umbrella coverage, that is. If you do have umbrella coverage, your umbrella coverage will come into effect after your standard liability coverage has run out, meaning you won’t have to dip into your own savings (or worse, file for bankruptcy) to cover the balance.
Make sure to set aside some time each year to review your policy and ensure that the limits and coverage you have selected are right for you. Evaluate your needs. Contact your Orr Insurance Broker today if you have questions about an umbrella insurance policy.