Personal Umbrella Insurance: A Low-Cost Way to Get Significant Extra Liability Insurance
Whether it’s a serious car accident involving pricey medical bills or an incident on your property, you can quickly find yourself responsible for damages that exceed the limits on your auto or home insurance policies. With a personal umbrella insurance policy, you can be protected from liability claims with affordable coverage that goes beyond the limits of your home or auto policy.
How Does Umbrella Insurance Work?
An umbrella policy kicks in when your basic liability limits run out to provide additional protection by extending your home or auto policies liability limits by $1M up to $10M. Let’s say you were found at fault in a distracted driver car accident with $850,000 in injuries, but your auto policy only covers $500,000 in liability. Your personal umbrella insurance would then cover the remaining $350,000 – keeping you and your savings safe from paying the costly gap after your auto coverage maxes out.
What Does Umbrella Insurance Cover?
Personal umbrella insurance helps you stay protected and covered in unexpected situations like:
- A guest is seriously injured at your home
- Your teen driver causes a severe crash
- Someone is bitten by your dog
- Major claims or lawsuits
- Damage you cause in a car accident while driving in another country
- Defending you if you’re accused of libel, slander and defamation of character
Who Needs Umbrella Insurance?
Some people are more likely to need an umbrella policy than others. If you engage in some activity that puts you at greater risk of incurring excess liability, you’re an even better candidate for an umbrella policy. Personal liability risk factors include owning property, renting it out, employing household staff, having a trampoline or hot tub, hosting large parties, or being a well-known public figure.
Having a teenage driver in the family also puts you at increased risk, as does owning a dog or owning a home with a swimming pool. Basically, the more likely you are to be sued, the more strongly you should consider purchasing umbrella insurance. But anyone who is risk-averse will sleep better at night knowing they’re protected by an umbrella policy.
Combine Additional Coverages to Maximize Savings
How Umbrella Insurance Can Help Bundle Holders
If you choose to bundle your home and car insurance policies, then you can often reap several financial benefits. Besides just that, bundling might also help you when enrolling in further coverage. One additional policy that might enhance your bundle’s benefits is umbrella liability coverage.
Does Your Homeowners Insurance Apply If You Rent Your Place Out
Whether you rent a room out, allow short-term rentals of your home, or rent your entire property out under a long-term lease, you need to be aware of the effects on your home insurance policy. Your policy may give you limited coverage, but your insurance won't apply to all situations.
Is Auto Insurance Cheaper When Bundled with Home Insurance?
Insurance agencies often recommend that you bundle home and auto insurance, but it’s not always that simple. There are a lot of different things to consider. While bundling your home and auto is usually cheaper, this isn’t always the case.