If you are like most people, you probably have a few insurance policies to protect yourself and your family in case of an emergency.
But what happens if you are involved in an accident that causes severe injury or damage to another person?
Your regular insurance policy may not be enough to cover the costs.
That’s where umbrella liability insurance comes in.
In this article, we will discuss what umbrella liability is, why you need it, and how it can protect you in the event of a lawsuit.
What Is Included In Umbrella Liability Policy?
In layman’s terms, an umbrella liability policy is a type of liability insurance that offers additional coverage or protection over the limits of other insurance policies that you may have.
For example, suppose your home insurance has a $500k limit on it, and you are sued for damages amounting to $700k.
In that case, an umbrella liability policy will provide the additional coverage of $200k to protect you from having to pay the remaining $100k out of your pocket.
Umbrella liability policies can be significant for high-net-worth individuals and families.
They offer an additional layer of protection if a large lawsuit or judgment is awarded against them.
In addition, umbrella policies also provide coverage for incidents that may not be covered by other insurance policies, such as libel or slander.
When deciding whether or not to purchase an umbrella liability policy, it is essential to consider the amount of coverage you need.
The average cost of an umbrella liability policy ranges from $200 to $350 per year for each million in coverage.
It is vital to make sure that you purchase a policy that provides enough coverage for your needs.
If you are a ride-sharing driver, it is essential to note that your personal auto insurance policy will not provide coverage for damages or injuries that occur during a ride-sharing trip.
As such, you may want to consider purchasing an umbrella liability policy to provide additional coverage for these types of incidents.
Suppose you are unsure whether or not an umbrella liability policy is right for you. In that case, it is essential to speak with a Los Angeles Lyft accident lawyer who can help you assess your risk and determine if this type of policy is the right fit for your needs.
That way, you’ll have peace of mind knowing that you are fully protected in the event of an accident or lawsuit.
Is It Worth Having An Umbrella Policy?
While some may think that it’s an unnecessary expense, the fact of the matter is that an umbrella liability policy can be a life-saving investment.
If you are ever sued for more than your regular liability coverage can provide, your umbrella policy will kick in and cover the difference.
This could mean the difference between losing everything and keeping your finances intact.
Umbrella policies also provide extra protection in other ways.
For example, if you are ever involved in an accident that causes severe injury or death, your umbrella policy could cover the resulting lawsuit.
An umbrella policy is a wise investment if you have significant assets that you would like to protect.
If you’re still unsure whether or not an umbrella policy is right for you, talk to an insurance agent.
They can help you determine whether or not this type of policy is necessary based on your individual needs and risk factors.
Several instances that umbrella policy is worth having include:
- You’ve caused an accident that injured someone seriously
- You’ve been sued for libel or slander
- Your dog has bitten someone
- A guest in your home has been injured
- You’re a contractor and have been sued for damages during a job
There are many other instances an umbrella policy could come in handy, and these are just a few to give you an idea.
If any of these situations sound like they could potentially happen to you, it’s best to err on the side of caution and get an umbrella policy.
Talk to your insurance agent today to learn more.
What Is Not Included In The Policy?
Next is to identify what is not covered by the policy. As with all insurance policies, there are specific exclusions.
An umbrella liability policy will not cover damages that occur as a result of:
- Intentional acts or omissions
- Criminal activity
- Professional malpractice
- Liquor-related accidents
- Vehicles owned by you or someone in your household
You can see that an umbrella policy does not cover a few key areas.
If you are concerned about any of these things, be sure to speak with your insurance agent to determine if they are protected under a different policy.
- How Much Coverage Do I Need?
The final question you need to ask yourself is how much coverage you need. This will depend on various factors, including your net worth and the number of assets you would like to protect.
Your insurance agent can help you determine how much coverage is right for you.
Generally speaking, it’s a good idea to have an umbrella policy that provides at least $500k in coverage.
This will give you peace of mind if something happens and you are sued for more than your regular liability coverage.
Final Words
Insurance is one of those things that you hope you never have to use but is invaluable when something does happen.
An umbrella liability policy is a great way to protect yourself and your assets in the event of an unexpected lawsuit.
Talk to your insurance agent today to learn more about this type of policy and whether or not it’s right for you.