Umbrella insurance, also known as personal liability insurance, is a type of coverage that provides an extra layer of protection for individuals and families. It is designed to supplement your existing liability coverage, such as auto or homeowners insurance.
When a claim is made against you that exceeds the limits of your primary liability coverage, umbrella insurance kicks in to provide additional coverage. For example, if you are found liable in a car accident that causes $500,000 in damages and your auto insurance only covers $250,000, your umbrella policy would cover the remaining $250,000.
Umbrella insurance can also provide coverage for claims that may not be covered by your primary insurance policy. For example, it can provide coverage for libel, slander, defamation of character, and invasion of privacy.
It’s important to note that umbrella insurance is a liability coverage and it doesn’t cover damages to your own property or injuries you may incur.
Umbrella insurance policies typically have a minimum coverage limit of $1 million, but can go up to $5 million or more depending on the individual’s needs. Premiums for umbrella insurance are usually very affordable and are determined based on factors such as the amount of coverage, location, and the individual’s claims history.
Umbrella insurance is a good option for individuals who have a lot of assets to protect, such as a home, investments, or a business. It’s also a good option for individuals who are at a higher risk for being sued, such as landlords, business owners, or those who frequently entertain guests at their home.
Overall, umbrella insurance is a cost-effective way to provide an extra layer of protection against the financial risks of liability claims, and is a good option for those looking to safeguard their assets and financial well-being.