Purpose of Umbrella Coverage
An umbrella policy protects your existing personal assets and future personal assets (like wages or future inheritance) against the cost of losing a lawsuit for another party’s “bodily injury”, “property damage”, or “personal injury”.
You don’t have to be wealthy to need an umbrella policy—even if you don’t have any assets, your wages can be garnished. A $1,000,000 policy typically costs under $200/year.
An umbrella policy provides excess coverage above and beyond what is provided by your underlying insurance. It picks up where your other insurance policies leave off. It has a high deductible because the deductible is designed to be met by your other policies.
What types of plans can be under the Umbrella?
An umbrella policy can cover many other policies. It is important to find out if the policies need to be scheduled to be covered.
Many umbrella policies require a certain minimum limit on the underlying policy in order to umbrella the coverage.
What does an Umbrella Policy Cover?
Umbrella policies help pay for legal fees and judgements for the other party’s medical bills, lost wages and “pain and suffering”.
An umbrella policy provides excess coverage above and beyond what is provided by your underlying insurance.
Have a long commute Drive during rush hour Drive in the city
Have a swimming pool Have a trampoline
Own a dog Entertain often
This put you at increased risk. Umbrella coverage is recommended.
What is not covered?
Umbrella Insurance provides liability coverage = PROTECTING OTHERS… So it does not cover, damage to property you own. Bodily injury or medical expenses of you or any person who is related by blood, marriage, or adoption and who lives in your home.
A PERSONAL umbrella policy does not cover lawsuits related to a business you own including babysitting (which you are compensated for) . However, your policy may still cover your children if they babysit part-time on someone else’s property.
Certain high risk activities like drag racing. Restitution for a crime you committed. Intentional Acts like intentional bodily injury or property damage, sexual harassment or discrimination.