Many people have heard of umbrella insurance policies, but don’t know exactly what it covers and why they should consider getting one. An umbrella insurance policy is a supplemental policy that provides coverage beyond the limits of your existing homeowners, renters or business insurance policies. It is important to understand how umbrella insurance works and why it may be beneficial for you to have one.
What Does an Umbrella Insurance Policy Cover?
Umbrella insurance policies provide broader coverage than a typical homeowner’s or renter’s policy. These policies typically provide additional coverage for liability claims such as libel, slander, false arrest, negligence, invasion of privacy and other damages not covered by standard insurance policies. This type of coverage can help protect against financial losses due to lawsuits.
Why Should You Get an Umbrella Insurance Policy?
There are several reasons why you might want to consider purchasing an umbrella insurance policy. First and foremost, these policies provide extra protection in the event that a lawsuit is filed against you or your business. Without this extra layer of protection, you could find yourself responsible for paying out-of-pocket expenses if the lawsuit exceeds the limits of your standard policy.
In addition, umbrella insurance policies can cover any gaps in coverage between different types of liability policies. For example, if you have both a homeowner’s and auto policy with different insurers, there may be some overlap in terms of liability coverage where one insurer’s policy stops and another begins. An umbrella policy can help fill those coverage gaps so that you can rest assured knowing that all potential liabilities are taken care of no matter the source.
Umbrella Insurance vs Personal Liability Insurance
Umbrella policies are often confused with personal liability policies and vice versa. While both provide similar coverage, there are some differences between them that should be noted. For example, personal liability insurance typically covers only bodily injury and property damage claims while umbrella policies cover both those claims plus additional ones such as libel/slander suits or false arrest claims up to the limit on the policy. Additionally, personal liability policies usually carry lower limits than those found on umbrella policies (typically $250K – 500K). So whether you choose a personal umbrella policy or a standard one depends on how much coverage you need and how much risk exposure you have overall.
Umbrella insurance policies offer an additional layer of protection for homeowners, renters and businesses alike when it comes to protecting against potential liability claims from lawsuits or other damages caused by negligence or other activities covered under the terms of your policy. While these policies may cost more upfront than traditional home or business insurance policies, they can save you thousands in legal fees if a claim is filed against you or your business exceeding the limits on your standard policy. Consider investing in an umbrella insurance policy today to ensure that your assets are properly protected! A BWO representative can help walk you through your options so you can make an informed decision.
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