- April 4, 2016
- Posted by: Liam Dai
- Category: Umbrella Insurance
What is Umbrella Insurance?
Ever had a rainy day of your life and wish you had an umbrella to shield you instead of just that rain coat? Umbrella insurance is like that: protection above and beyond your existing types of coverage.
Also referred to a personal umbrella policy (PUP), umbrella insurance acts as liability coverage that supplements your preexisting automobile and homeowners insurance policy, protecting you when those are not enough. In addition, umbrella insurance “fills in the holes” that other coverage plans are excluded. Let’s take a look at some types of coverage provided by umbrella insurance.
Types of Umbrella Insurance Coverage
Bodily Injury Liability: covers the cost of damages to another person’s body, including medical bills and liability claims.
- Injuries to others due to automobile accident where you’re at fault
- Injuries caused to others as a result of your pet
- Injuries sustained by a guest in your home due to a fall
- Injuries sustained by a neighbor’s child who falls while playing in your yard
Property Damage Liability: covers the cost of loss and/or damage to another person’s property.
- An auto accident where you are at fault that caused damage to vehicles and property
- Damage claims incurred when your pet rips up a stranger’s flowerbed
- Damage to school property caused by your child’s behavior
Owners of Rental Units: As a landlord, this covers liability claims from your rental property.
- A broken staircase that injures someone on your rental property and suing you for damages
- A dog of your tenant bites someone and you are held responsible for the injuries
Umbrella coverage also extends beyond just tangible damages. Coverage is also provided for:
- Slander and libel
- False arrest, detention, or imprisonment
- Malicious prosecution
- Shock, mental anguish, pain and suffering claims
- And other personal liability scenarios
A Practical Example
While the concept is relatively simple, let’s take a look at a practical example:
Suppose you are involved in a car accident that causes medical bills and property damage to other individuals and property, totaling $250,000. Unfortunately, your Bodily Injury limit for your auto insurance policy is only $100,000 and your Collision coverage is only $100,000. This totals to $200,000 of coverage, leaving an excess of $50,000 of costs for you to deal with. If you didn’t have umbrella insurance, this would be out-of-pocket expenses. However, if you have an umbrella insurance policy, that additional $50,000 would be covered by the umbrella insurance policy. This grants you peace of mind, especially since most umbrella policies are bought in $1m increments. In other words, you’re covered against those rainy days…
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Knowing is half the battle when it comes to insuring yourself and making sure you, your family, and your property is secured against loss. Of course, not all insurance policies are easy for the novice to discern when and where they begin and end. At RiskBlock, we understand that insurance can be a confusing process, especially when you’re looking to purchase something as invaluable as umbrella insurance. That’s why we recommend you click here and speak to one of our qualify agents to make sure you never get soggy from life’s rainy days.