What is Umbrella Insurance?
Umbrella insurance is extra liability insurance over existing primary limits. It is designed to help protect you from major claims and lawsuits and as a result, it helps protect your assets and your future. It does this in two ways:
- Provides additional liability coverage above the limits of certain policies such as your homeowners, auto, and boat insurance policies. This protection is designed to kick in when the primary liability on these other policies has been exhausted.
- Provides coverage for claims that may be excluded by certain liability policies such as false arrest, libel, slander, and liability coverage on rental units you own.
You may be thinking that your auto and homeowners’ insurance should cover these situations, which may be true. But umbrella coverage insures you above and beyond the limits of those policies. Also, umbrella insurance covers some situations that are not typically covered by your other personal insurance policies.
Wondering if you appropriately covered? Make sure you understand key risk areas that may not be part of your standard Homeowners or Auto policy and where you may benefit from additional coverage.
Here are Some Examples That an Umbrella Policy Covers
- Bodily Injuries
- Damage to third-party property
- Certain personal liability occurrences
Bodily Injury Liability – covers the cost of damages to another person’s body. Examples include the cost of medical bills and/or liability claims because of:
- Injuries to other parties due to a serious auto accident where you are at fault
- Harm caused to others because of your dog injuring someone.
- Injuries sustained by a guest in your home due to a fall
- Injuries sustained by a neighbor’s child who falls while playing in your yard
Property Damage Liability – covers the cost of damage or loss to another person’s tangible property. Examples include the cost associated with:
- Damage to vehicles and other property because of an auto accident where you are at fault
- Damage claims incurred when your pet rips a friend’s priceless oriental rug to shreds
- Accidental damage to school property caused by your child
- Damage to physical property of a third-party.
Owners of Rental Units – helps protect against liability that you may face as a property owner. Examples include the cost of liability claims because of:
- Someone tripping over a crack in the sidewalk of your rental property and suing you for damages.
- Your tenant’s dog biting someone and you being held responsible for the injuries.
- Tenants who are unable to escape during a fire and it is determined that the landlord is negligent.
Umbrella coverage also protects you should you be sued. Some Examples:
- Slander – injurious spoken statement
- Libel – injurious written statement
- False arrest, detention, or imprisonment
- Malicious prosecution
- Shock/mental anguish
- Other personal liability situations
- Non owned auto, boats, or aircraft
Unfortunately, we live in a very litigious world. Large claims or damages can be very expensive to defend (even of the suit is groundless) and large compensatory judgements are commonplace in the USA and globally.
About CMR | PolicySmart®
PolicySmart’s risk management consultants provide independent group benefit, retirement and commercial insurance advice by reviewing your current portfolio of policies to improve coverage and reduce cost. By using our proprietary database – The CMR Database® (comprising some 13,000 brokers and specialists globally), we maximize access to the insurance and retirement industry providing greater options that will translate to better coverage and lower cost.
Please email croche@policysmart.app or call 888-873-1982 or 212-447-4300 for more information. www.policysmart.app
