It’s likely that you already have many insurance policies such as homeowners, life, and auto; however, those may not offer sufficient liability coverage in a time of need. Also known as excess liability insurance, umbrella insurance kicks in when your existing liability coverage has been exhausted. Ultimately, the primary purpose of umbrella insurance is to offer pivotal financial assistance in dire and emergency circumstances. Let’s look at an example for further context:
- Steve has $500,000 of liability coverage as part of his auto insurance. Unfortunately, he is in a car accident and is at fault. Luckily, Steve has an umbrella policy of $1,000,000 that will kick in after his auto liability coverage has been exhausted. Assuming that the other party in the accident settles for $1,500,000 in damages, Steve will not have to pay anything out of pocket. If Steve did not have an umbrella insurance policy, he would be on the hook for $1,000,000 that he would have to cover personally.
Umbrella insurance boils into three main categories:
- Bodily Injury Liability: Pays the cost of injuries to another person resulting from a car accident, injury from the owner’s pet, or guests that are injured while at the owner’s home.
- Property Damage Liability: Covers damage to a third party’s property resulting from a car accident or accidental damage caused by a child at a school or another location.
- Personal Liability: If you are sued for slander, libel, malicious prosecution, mental anguish, or similar, your umbrella insurance policy will cover the damages to the policy limits.
At Client First Insurance Solutions in Americus, GA, we’ll help you navigate the umbrella insurance market and determine if a policy is right for you. Give us a call today to learn more information.