Umbrella Insurance
You may have been told in the past that you need an Umbrella policy – but do you really need one?
Umbrella insurance provides coverages when your homeowners, auto, and boat policy limits are exhausted such when you have a complicated claim, when there is significant property damage for which you are responsible, or when someone was seriously injured due to your actions or negligence. An umbrella policy may also provide coverage for claims that may be excluded on your underlying policies such as false arrest, libel, slander, malicious prosecution, or even if you are sued for mental anguish. Always refer to your policy documents or speak to your insurance specialist as coverage may vary by company and by policy.
Here are some examples of where an Umbrella policy could protect a policyholder:
Example #1 – John caused an accident on the highway that involved 2 other vehicles. The operators of the other two vehicles were both injured and required transport to the hospital by ambulance. Thankfully, one driver suffered only minor injuries and was released that day. John was responsible for the damage to his vehicle and the ambulance to the hospital. The other driver required surgery and was out of work for several months and sued John for the medical costs, damages to his vehicle, and lost wages.
Example #2 – You have a New Year’s Eve party at your home. You provide the food and most of the drinks to celebrate, including acoholic beverages. As usual, that college friend of yours doesn’t know her limits. You don’t notice when she leaves the party and drives herself home. She is in a terrible accident and a passenger in the other vehicle is killed. The family sues you and your found liable for serving the friend too much to drink.
Example #3 – Your teenage son cannot stand his math teacher who does seem to have it out for him. Unbeknownst to you, after a particularly frustrating day, he logs onto his social media page and says some pretty damaging things about his teacher. The teacher sues and is awarded $500,000.
These examples are not unusual occurances and would likely exceed one’s underlying auto or homeowner’s policy limits. Umbrella policies are very reasonably priced considering what they cover and when the unexpected happens, they can be the difference between losing everything and maintaining your financial stability.