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 of being sued.
What Does Umbrella Insurance 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.
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.