Umbrella insurance is an additional layer of financial protection that covers damages beyond what your standard insurance policies cover. It’s designed to protect your assets in case you are sued for something that exceeds the liability limits of your underlying policies. But what exactly does an umbrella policy cover, and what doesn’t it cover?
Firstly, it’s important to note that umbrella insurance typically covers the same things as your underlying policies, such as auto, home, and liability insurance. However, it goes beyond just these policies by providing additional liability coverage. If you are found liable for damages in excess of your underlying policies, your umbrella insurance will kick in to cover the extra costs.
In general, umbrella insurance will cover a wide range of liability scenarios, including bodily injury or property damage caused by you or a member of your household, slander or libel claims, and landlord liability. It also covers legal fees and settlement costs associated with a lawsuit.
However, there are certain things that an umbrella policy does not cover. For example, it typically does not cover intentional or criminal acts, such as fraud, assault, or driving under the influence. It also does not cover any business-related activities or elder abuse. Finally, there may be specific exclusions listed on your umbrella policy, so it’s important to review it carefully to understand what is covered and what isn’t.
Another important point to keep in mind is that your umbrella policy will have a set liability limit. This is the maximum amount that the policy will cover in the event of a claim. Common liability limits for umbrella insurance policies are $1 million, $2 million, or $5 million, but there are policies available with even higher limits.
It’s also worth noting that you may need to meet certain requirements to qualify for an umbrella policy. For example, you may need to have a certain amount of underlying liability coverage in place before you can purchase an umbrella policy. Providers may also require you to undergo a background check or provide references.
In conclusion, an umbrella insurance policy can provide peace of mind and additional protection for your assets. However, it’s important to understand what is covered and what isn’t, as well as any specific requirements or exclusions on your policy. Speak to your insurance provider to learn more about what an umbrella policy can do for you.
