Umbrella insurance provides excess liability coverage above the limits of your standard auto and homeowners insurance. Its primary function is if you are sued and need to pay damages, legal fees, or civil costs, umbrella insurance can cover that. The kinds of people who typically purchase umbrella insurance are those who have significant savings/assets, own a business/property/swimming pool/trampoline, coach youth sports, do extreme sports, or own a certain type of dog (usually the ones you need a permit to acquire). The critical detail is that umbrella insurance kicks in when your base liability limits have been reached. Think about umbrella insurance as extra coverage in case something absolutely catastrophic occurs.
What is Covered in Umbrella Insurance
Lets begin with what umbrella insurance does cover: lawsuit settlements resulting from an incident in your home, yard, or pool. It also covers judgements from a court of law in regard to defamation. Medical expenses or damages if a visitor is injured at your home (or rental property) as well as damages you commit to someone else’s property (car or home) can fall under this bracket. Contrarily, umbrella insurance does not cover the following: business losses, damage to your property, contract disputes, personal belongings, and criminal acts.
How to choose the correct Umbrella Insurance
In order to choose the correct umbrella insurance it is critical to consider some factors. We first consider the average cost: for one year of coverage up to $1 million, the average annual cost is $383. Make sure to compute the total value of your assets. In addition, you must review your insurance policies to not have any coverage redundancies. Most insurers that provide auto, home, and boat policies will also sell umbrella insurance. It is important to note that you must have a certain base limit of home and auto insurance for a distributor to consider selling you a policy. Insurers do not want to be responsible for low dollar amounts.
If regular insurance (medical, auto, boat, homeowner, etc.) is to protect against things for which you cannot prepare, umbrella insurance exists to protect you against something you didn’t even think was possible. 38% of Americans own dogs. None of us think that our precious baby could ever bite someone, but if they did, umbrella insurance is what will cover you in case someone sues you (and your dog).
Looking for a quote on umbrella insurance? Winstead Insurance would love to help, and can provide a free quote. Contact us today!