Typically, if you were to lose a property damage or personal injury lawsuit, your liability insurance would be more than enough to compensate the claimants. However, there is a small possibility your underlying liability policy may be inadequate. In such a situation, you could potentially lose all your assets, driving you into financial ruin. Fortunately, thanks to umbrella insurance, things do not necessarily have to end up this way.
Read on to learn how to protect your family and assets with umbrella insurance.
Umbrella Insurance – An Overview
Categorized under liability insurance, umbrella insurance is a type of policy that covers claims in excess of your car, boat, or homeowners insurance coverage. In essence, you can think of it as a fail-safe for your assets and savings. Similar to liability insurance, umbrella insurance covers the financial losses of third-party bodily injuries or death, as well as third-party property damage. This means it excludes the policyholder’s property. It is also important to note that if you have a family, your umbrella policy will cover your family members, too.
Scope of Coverage
Designed specifically to complement your underlying liability insurance, a typical umbrella insurance policy covers the following liabilities:
• Landlord liability
• Personal injury
• Bodily injury
• Property damage
Personal Umbrella Policy – Exclusions
Granted, a personal umbrella policy offers broad coverage, especially compared to other types of liability insurance policies, which typically only cover specifically named risks. However, this does not necessarily mean that a personal umbrella policy has no exclusions. Keeping this in mind, some of the possible umbrella policy exclusions include:
• Contractual liability you agreed to assume via a contract you signed
• Liability incurred in professional or business activities
• Damages related to armed conflicts
• Damage to your personal property
• Malicious or intentional damage caused by a covered member
Umbrella Insurance versus Excess Liability Insurance
Note that excess liability protection insurance and umbrella insurance are different types of liability insurance. The former, as the name implies, only provides coverage for the specifically named incidents in your underlying liability insurance policy, such as homeowners insurance or car insurance, and typically comes with the same exclusions. For instance, if you carry excess liability coverage on, say, your home insurance policy, you’ll likely have additional coverage if you’re found liable for a claimant’s bodily injury at your home.
An umbrella policy, on the other hand, may cover the risks specifically named in your underlying liability policy as well as incidents excluded in your underlying liability policy. For instance, while your standard homeowners liability policy may not necessarily protect you for a slander or libel judgment against you, even if you carry excess liability coverage, an umbrella insurance policy can probably help you in such a situation.
You can use umbrella insurance to protect your family and assets. If you are looking to buy the best umbrella insurance, contact the experts at Gant Insurance Agency in McKinney, Texas. We are ready to help you with all your coverage needs today.