It is not a policy that protects you from rain for sure. Personal Umbrella Liabilities Policies can be economical way of covering most angles of possible liabilities claims you may face. Generally, it is designed to protect you from large lawsuits and claims. Therefore, it protects your assets and future. It works in two ways to achieve this objective.
1. It provides additional coverage on top of your auto, home and boat insurance. This policy kicks in when your liabilities covers are exhausted on your other policies.
2. It provides coverage for possible claims that may not be included in your other policies. These are; libel, slander, false arrest and liability coverage on rental units.
What Does Personal Umbrella Insurance Cover?
This provision can be seen as additional layer of protection that runs alongside your other liabilities policies. As well as providing extra coverage for similar claims it also provides cover for situations that are not included in a standard home or auto liabilities. Here are some of the covers provided by these types of policies;
Bodily Injury Liabilities: covers the costs of bodily injuries third parties sustained as a result of your actions or within your properties. These include medical treatment costs and consequential losses. Some of the examples are:
· Third party injury claims as a result of an auto accident you caused.
· Injury sustained in your home by a guest or injuries to children who were playing in your garden.
· Injuries caused to others by your dog or pets.
Property Damage Liability: It works on the similar basis as other liability policies and covers damages to third party properties including homes, vehicles, bicycles and personal possessions. Here are some of the examples to these costs and claims;
· Damages caused to other people’s vehicles, homes and properties as a result of a car accident you caused.
· Accidental property damages caused to other people by your or your family members’ actions. This could include damages caused to school properties by your children. If you are responsible for them you are liable for their actions.
· Damages caused to other people’s property and possessions by your pets.
Rental Unit Owner Liabilities: This covers liabilities claims you may face as the owner of a rental property. Here are some of the examples;
· Claims people may bring against you for damages they suffered in your rental property. For example, they may be tripped by a lose patio stone in your property and injure themselves.
· Your tenants or their pets may cause injuries and damages to others around and you may be sued for it.
Additional Coverage for Being Sued for:
· Libel – as a result of something you have written
· Slander – as a result of something you said
· False arrest, imprisonment or detention.
· Malicious prosecution
· Mental anguish caused
· And other personal liability cases
How Does It Work in Practice?
Perhaps an example will help you understand how this types of policies work. Let’s say that you had an accident and found to be at fault. Third parties made large injuries claims of $600,000 as a result but your auto insurance liabilities limit is $500,000. Since your auto liabilities policy is exhausted you need to find $100,000 more to pay the claims.
Otherwise, they will start proceedings to liquidate your assets including your home and cars to get paid for their losses. The personal umbrella policy you took will come to your rescue and pay the shortfall of $100,000 in this case. In the same way, it provides additional layer of protection on top of your home or boat insurance.
What Are Umbrella Coverage Limits and Costs?
It is an extra piece of mind you can buy at a reasonable cost especially if the company is already providing you the other liabilities coverage. Usually coverage limits start at $1 million and can go up to $10 million if you qualify.