You know you need car insurance for your vehicle and homeowner’s insurance for your home, but is that enough to protect your assets and financial security? Excess liability insurance or an umbrella insurance policy is an important consideration for individuals who are assessing their personal risk management strategy.
Understanding Umbrella Insurance
Umbrella policies and excess liability policies provide additional liability coverage beyond the limits of existing auto and homeowner’s insurance policies. Umbrella policies usually begin at a minimum of $1 million in coverage; however, the coverage options can increase to as much as $10 million or more. Even if you have less than $1 million dollars in assets you still should consider an umbrella policy because the costs of a serious lawsuit or accident could put your finances and assets in jeopardy.
How Umbrella and Excess Liability Coverage Work
If someone was injured on your property and their medical expenses exceed the liability limits of your homeowner’s insurance then your umbrella policy would cover the remaining balance up to $1 million or your designated limit. The same situation would apply if you caused an at-fault car accident and the injuries or damages exceeded the liability limits of your auto policy. With umbrella liability insurance you can rest assured that your savings, home and future earnings would be protected.
Umbrella Liability Insurance vs. Excess Liability Coverage
While the terms umbrella insurance and excess liability insurance are used interchangeably they are actually not the same. Umbrella policies not only increase the liability limits of your existing insurance, but they also extend to cover situations beyond your traditional coverages. On the contrary, excess liability coverage will only pertain to what is included in your underlying policies with some possible restrictions.
Read on to learn more about the additional benefits of umbrella coverage or contact one of our qualified insurance agents to determine which policy will work best for your needs.
Additional Coverage with an Umbrella Policy
Some additional coverage benefits of a personal umbrella policy may include:
- Rental items beyond cars – While auto coverage might extend to a rental car it would not extend to other rentals such as boats. This is where an umbrella policy would be useful.
- Lawsuits involving alleged defamation or libel – If you post on social networks, blogs or review sites you can open yourself up to accusations of slander by businesses or individuals. If you find yourself facing a defamation lawsuit your umbrella policy can help cover your defense fees.
- Worldwide coverage – Umbrella liability insurance would protect you for incidents and accidents that occur outside of the United States.
What is Not Covered Under an Umbrella Policy
It is important to note that umbrella policies are not all-encompassing. Some exceptions may include:
- Damage to your personal property.
- Business-related liabilities or losses.
- Personal injuries.
- Injuries or damages resulting from criminal activity.
- Contract disputes.
Umbrella Insurance Cost
It is often assumed that an umbrella policy is expensive given the high liability limits; however, in actuality, they are quite affordable especially for the amount of coverage they provide. According to the Insurance Information Institute, a $1 million umbrella policy ranges from $150 to $300 per year, which can rise by $50 to $75 per year for each additional $1 million coverage increase. The affordable rates are due to the fact that the umbrella coverage would only be used once you have exhausted your coverage limits on your auto or homeowner’s policies.
Get an umbrella insurance quote online or over the phone.
Now that you understand the benefits of umbrella insurance and how affordable it can be, reach out to one of our experienced agents to take the next step towards protecting your financial future. Request an umbrella insurance quote online or over the phone by calling (800) 836-2240.