Umbrella Insurance Policy – What does & Who does

Umbrella insurance is also known as personal liability umbrella insurance
as it covers all the additional liability that your existing insurance policy
does not cover such as home and auto insurance. It safegrounds your assets
as well as your savings from lawsuits and damages.

How does Umbrella Insurance work?

Umbrella insurance pays out once you’ve exceeded the liability limit in your
existing home or auto insurance policy. To understand it better, here is an example:

Let’s say you are hosting a party at your house and your drunk friends
fell from stairs, in this scenery the you become financially responsible for
that incident.

So if your friend’s medical fees total $70,000 and your liability insurance
only covers $ 50,000, the umbrella insurance additional $ 20,000. So, you
don’t have to pay that money out of your pocket.

What does an umbrella insurance policy cover?

This policy covers problems from bodily injuries and property damage
that has been caused to others that are beyond the limitation of home or
auto insurance policy to lawsuits as defamation, libel or slander that are not
covered by house-owners insurance.

Members of household like spouse and children are also covered under this
policy. This policy covers excess liability coverage for problems like:

● Car accidents caused by you or licensed driver or less experience teen
driver that are at fault
● Injury caused by your pet by biting someone
● Accidental injury that happens to someone visiting your property
● Injury caused by children
● Accidental property damaged caused by you like faulty wiring

It is also extends coverage to situations that are not covered by standard
insurance policy , it also covers the cost of court and attorney fees if you
have cases for:

● Libel
● Slander
● Defamation
● Invasion of privacy

What does an umbrella insurance policy not cover?

It does not cover medical expenses or damages done to your own property.
Just like car liability insurance does not cover the damages caused to your
own vehicles, umbrella insurance policy does not cover the cost of repairing
your own property or paying your own bills or injuries to you or other
members of your household.

The other instances that are not covered by policy:

● Intentional acts, like damaging your own car by accident
● Criminal acts, like you hit someone by car while driving under
influence
● Business properties and activities, like if you are contractor and
damage someone else properties.

Who needs an umbrella insurance policy?

It is good for everyone but it is specially for the person who has high net
worth (attractive targets for lawsuits) are the someone who holds the
position that increases the chances of them being sued for benefits.

You may also need umbrella insurance based on the risks in your home. For
example, if you own a pool or trampoline, you may want to consider extra
liability coverage through an umbrella policy since there is an increased
risk for injury.

And if you have teenage drivers in the house, who may be more likely to
cause an accident that could result in a lawsuit, umbrella insurance is worth
looking into.