What Is Umbrella Insurance?
Before you ask yourself “do I need umbrella insurance?” you should first understand what umbrella insurance actually is. A personal umbrella policy (PUP) provides additional liability coverage that your average home or auto insurance plan wouldn’t.
In the event of an accident, you may be held liable for the damage. This can put a huge strain on your personal funds, savings, and future earnings. A personal umbrella policy helps protect you from taking on these financial burdens by providing additional liability coverage. So if you cause damage to a person or their property and the damage exceeds the limits on your homeowners, high-value home insurance, or auto insurance policies, umbrella insurance has got you covered!
When Does Umbrella Insurance Come in Handy?
It’s hard to decide if you truly need a personal umbrella policy without providing a few specific examples of when it might come in handy. Here are some situations where your policy could help dig you out of a financial hole:
Situation 1: A Car Wreck
We’d all like to think that our driving is perfect, therefore we won’t ever get in a wreck. The unfortunate truth is that accidents happen to even the most skilled and cautious drivers. You can’t control the weather or how others drive around you and humans make mistakes. That’s just life.
So if you were to get in a car crash and the other person was badly injured, you may be held liable for their medical bills if they exceed your auto liability coverage. This is where umbrella insurance helps out.
Situation 2: Damaged Rental Boat
Renting a boat while on vacation seems like a great idea right? You get to explore places you normally wouldn’t on your own time. What could go wrong? Well, the thrill of driving a speedboat on open waters is all fun and games, until you hit a floating log or submerged boulder.
No one thinks that it will happen to them, but if it does you could be liable for a large sum of money. POOF! There goes the rest of your vacation funds… Unless you have umbrella insurance.
Situation 3: Defamation Lawsuit
The online world has become a dog-eat-dog kind of place. Let’s say you’re going out to grab a quick bite to eat after work and the waiter messes up your order. You let the stress of the day and this small mix-up get the best of you and quickly write out an extremely negative review. Normally nothing comes of this, but there is the chance that it results in a defamation lawsuit.
You may be forced to pay for your momentary breakdown… or you could be covered by umbrella insurance!
- Your dog bites a neighbor’s child and the injury requires surgery.
- There is an accident on your rental property.
- A fire in your condo spreads to other units or just triggers the building’s sprinklers.
- You’re in a serious auto accident with significant injuries.
- You’re the third car in a four-car pileup, and the fourth vehicle is a police cruiser. (This actually happened to one of our clients.)
You may also need a personal umbrella policy if you…
- Own a home, rental property, or multiple residences.
- Regularly drive a car or let someone else borrow your car.
- Have a pool, hot tub, trampoline, ATV, boat, or motorcycle.
- Have a pet or pet sit for somebody else.
Can I Get Just An Umbrella Policy?
Under most circumstances, the umbrella policy will require that you also carry your auto policy with the same company. Certain underlying liability limits will be required. Individual umbrella policies can be purchased through excess lines agencies.
So… Do I Need Umbrella Insurance?
If you feel that you’re at risk of being in any of the situations detailed above or simply want the peace of mind that comes with additional coverage, then umbrella insurance is right for you. Personal umbrella policies typically offer up to $1,000,000 worth of liability protection.
For more information or if you’re still unsure if you truly need to invest in umbrella insurance, don’t hesitate to reach out to one of our knowledgeable independent agents. They’d be more than happy to talk through the details and explore policy options so that you can find the one that’s right for you.