What’s Personal Umbrella Insurance? Personal umbrella insurance is for people who would like to add extra liability coverage over and above another insurance policy. Usually, people get personal umbrella insurance for their auto and homeowners insurance.
What Does Personal Umbrella Insurance Cover?
Personal umbrella insurance is to protect people from large liability claims or judgements. Personal umbrella insurance helps when underlying liability limits have been reached. Bodily injury, personal injury, property damage and landlord liability is usually covered by personal umbrella insurance.
Personal Umbrella Insurance Policy in Action
Now, here are some examples so that you can better understand how a personal umbrella insurance policy works.
- Car Accident
The policyholder gets in an at-fault accident that injures the other driver. Your regular auto insurance policy covers the injuries of the other driver with a limit of $250,000. The other driver is severely injured, and their medical bills are going to be approximately $700,000. You may be legally responsible for their medicals bills exceeding $250,000. If the driver decides to sue you, your personal assets could be at risk.
Your regular auto insurance policy is going to cover $250,000 of their medical bills. $450,000 is needed to cover the rest of their medical bills for their severe injuries. Once your auto insurance policy limit is reached, that’s where a personal umbrella insurance policy will pay the remaining balance of $450,000.
- Personal Property
The policyholder has a leak underneath their shower. The policyholder needs to replace their walls and floors because of the water damage. The leak ruins the neighbor’s walls and floors, and they need to be replaced as well. A personal umbrella insurance policy won’t cover the policyholder, but the insurance company will pay for the neighbor’s below them to replace their walls and floors.
What Isn’t Generally Covered By a Personal Umbrella Insurance Policy?
- Personal Property
Personal umbrella insurance usually only covers people who are responsible for damages to someone else’s property. Usually, it won’t cover damage to the personal property of the policyholder.
- Business losses
If the policyholder experiences business losses, personal umbrella insurance won’t usually cover them. Even if the business is from the policyholder’s home, they still wouldn’t be covered.
- Intentional or criminal acts or omissions
A personal umbrella policy won’t protect the policyholder for their own intentionally harmful or illegal behavior.
- Written or oral contracts
A personal umbrella policy usually won’t cover the policyholder from liability that arises in the connection of a written or oral contract they’ve entered.
If you would like to discuss your options in regards to What’s Personal Umbrella Insurance and how it may work into your coverage options.