Extra liability insurance coverage that goes beyond the limits of the insured's home, auto or watercraft insurance. It provides an additional layer of
security to those who are at risk for being sued for damages to other people's property or injuries caused to others in an accident. It also protects
against libel, vandalism, slander and invasion of privacy. An umbrella insurance policy is very helpful when the insurance owner is sued and the dollar
limit of the original policy has been exhausted. The added coverage provided by liability insurance is most useful to individuals who own a lot of assets
or very expensive assets and are at significant risk for being sued.
What Does Umbrella Insurance Cover?
- Bodily Injury. If you injure someone in a car accident and the medical bills exceed the limits of your auto insurance, an umbrella policy picks
up the tab. Similarly, if the electrician slips and falls down the stairs while leaving your house, the umbrella policy covers any medical bills beyond the
limits of your homeowners policy. You're also covered for types of injuries that other insurance doesn't cover. For instance, if your dog bites someone while
you're out on a walk, homeowners insurance doesn't cover the damage, but umbrella insurance does.
- Property Damage. If your teenager crashes the family car through a fence and into the side of your neighbor's house, an umbrella insurance policy can pay
for any damage beyond the limits of your auto insurance. The policy also covers damage that isn't included in auto and homeowners policies. If your pet claws
up a priceless painting in a neighbor's house, or your child knocks over an antique crystal vase, or you rent a boat during a vacation and accidentally crash
it into a pier, an umbrella policy can take care of the damage.
- Other Legal Damages. An umbrella insurance policy protects you if you're sued for libel or slander - written or spoken words that cause injury to someone
else. It can also protect you against suits for false arrest, malicious prosecution, violation of privacy, and a variety of other civil charges.
- Legal Fees. A final perk of umbrella insurance is that it takes care of your legal fees and court costs in a lawsuit. Lawyers are expensive, and the cost
of a major lawsuit could force you into settling out of court, even if you know you're not really at fault. With an umbrella policy, you know you can afford a
good lawyer to protect your assets.