What’s Umbrella Insurance And How Does It Benefit Me?
Umbrella insurance is extra insurance that provides protection beyond existing limits and coverages of other policies. Umbrella insurance can provide coverage for injuries, property damage, certain lawsuits, and personal liability situations.
Umbrella Insurance Example
For a quick second, let’s take a moment to imagine a scenario playing out.
You’re driving around in your brand new 2022 Jeep Grand Cherokee. You take a glance over to change the song on your Spotify playlist and BOOM! You ended up running a red light and T-Boning another car.
There happens to be immense damage to the vehicle and several passengers are insured. The other person’s car needs about $35,000 in repairs and hospital treatment of the injuries is around $250,000. The driver of the car, however, is a licensed business coach who is unable to work for about 6 months. Because of this, he decides to sue you for $200,000.
Now you owe around $485,000. If your car insurance limits carry only $300,000 in liability coverage, the remaining $185,000 would have to come out of your pocket.
However, since you have an Umbrella, it would pay the difference on what you still owe ($185,000). It could also be used to cover any legal costs and slander in the lawsuit.
What Does Umbrella Insurance Cover?
- Other parties’ funeral costs and injury treatments
- Others’ property damage
- Your legal defense costs
- Liabilities that happen outside of the U.S.
- Claims like libel, slander, defamation of character and invasion or privacy
What Does Umbrella Insurance NOT Cover?
- Business losses
- Intentionally harmful behavior
- Your own injuries
- Damage to your personal belongings
- The liability you assume under contract
If you do not already have an umbrella on your policy, now’s the time to contact us today to get a quote.