What Is The Purpose Of A Personal Umbrella Or Excess Insurance Policy?

What is Personal Umbrella Insurance?

Personal umbrella insurance is an insurance policy that goes “on top” of your existing homeowners, auto, or watercraft insurance policies.  If a claim exceeds the coverage available from one of these underlying policies an umbrella policy can pay the overage.  Without the umbrella, you could be responsible for any amounts above your policy limits.

Instead of paying out of pocket, an umbrella insurance policy can provide additional coverage. It typically covers members of your household and may also provide some coverages that are not available from your standard home, auto, or boat insurance policies.

For example, if your teenage driver is involved in an auto accident, umbrella insurance can cover damages that exceed the limit of your auto policy.  Similarly, large losses that might exceed the limit of your homeowners’ policy, such as a severe injury that occurs to a visitor to your home, are typically covered by umbrella insurance.

How Does Umbrella Insurance Work?

Your umbrella insurance coverage is available to help cover large losses and to fill gaps in coverage.  For example,

Many auto insurance policies have limits of $250,000.  If you find yourself involved in an accident with multiple injuries, medical bills may exceed your policy limits.   For example, Say the medical bills total $500,000, but your cover only offers $250,000 of coverage.  An umbrella policy can step in to cover the $250,000 difference.

Other advantages of umbrella insurance that may not be in homeowners insurance include:

• False arrest, detention, or imprisonment
• Wrongful entry or eviction
• Invasion of privacy
• Malicious prosecution
• Slander, defamation, and libel, such as posting defamatory information about someone else on a website.

What is Not Covered?

While a personal umbrella policy can cover you in many instances, like all insurance there are some exclusions.  Generally, intentional or criminal acts, business liability, breaches of contract, and damage to your personal belongings are not covered.  It is important to read your policy and talk with your agent to be sure you understand how a personal umbrella can help you and what is covered.

Whenever you require any assistance with getting your personal umbrella or excess insurance, contact us at InsureYourCompany.com for immediate assistance.