What is an Umbrella Policy?
Umbrella insurance is simply extra insurance. It is additional liability insurance designed to help protect you from major claims and lawsuits that exceed the limits of your standard home, auto or other insurance policies. The cost of an umbrella policy is minimal compared to the peace of mind it provides.
Umbrella Insurance helps protect your assets and valuables in two main ways:
- To kick in when the liability limits of your home, auto, boat, or other insurance policies have been exhausted.
- To help cover claims that may be excluded by other liability policies including false arrest, libel, slander, and liability coverage on rental units you own.
What Does Umbrella Insurance Cover?
An umbrella policy is something you place in addition to your standard insurance, not in place of a home, auto, or other insurance policy types. It provides excess liability coverage for:
- Property Damage Liability
- Certain Lawsuits
- Bodily Injury Liability
- Owners of Rental Units
- Slander
- Libel
- Other Personal Liability Situations
So, What Does This Mean to Me?
Let’s assume you were in an auto accident that was your fault. The bodily injury limit on your auto insurance policy is $300,000. For just the cost of your deductible, your insurance company pays out a maximum of $300,000 to the party who sustained the injury. But what if the actual cost of the injuries resulting from your accident was $400,000? Who will pay the additional $100,000 for the accident damages? This is the area where an umbrella policy kicks in and covers the additional amount that is beyond the limits of your standard auto insurance policy. Of course, you never intend to be in the type of accident that causes any damage, let alone such an extreme amount, but even the best drivers can make mistakes.
Umbrella insurance policies help provide you with peace of mind, so that in most instances you can remain financially protected by a quality insurance policy and not left holding the bag for excess costs. Umbrella polices aren’t for everyone. We suggest you talk to one of our Synergy Insurance team members to find out if this type of coverage is right for you and your insurance needs.