Umbrella insurance is a type of liability coverage that provides an additional layer of protection beyond your existing policies. This coverage kicks in after your primary policies have been exhausted, safeguarding you from major claims and lawsuits, as well as covering legal fees and settlements that could significantly impact your financial situation.

This separate policy extends coverage to all of your underlying policies (home, auto, recreational vehicles, etc.). For example, if you have a homeowners policy with a liability limit of $500,000 and a claim exceeds that amount, your umbrella policy can cover the remaining costs. Your primary policy handles the claim first, and the umbrella only activates if the claim exceeds that primary limit.

Real-Life Scenarios Where Umbrella Insurance Can Help

1. Catastrophic Car Accident: Imagine you’re driving and cause a serious accident that results in significant injuries to another driver and their passengers. If your auto insurance policy has a liability limit of $300,000 and the total medical bills and damages amount to $750,000, your auto insurance would cover the first $300,000. You would be personally responsible for the remaining $450,000. Here’s where your umbrella policy steps in, covering that extra $450,000.
2. Social Media Risks: A careless post on social media could lead to defamation claims. If someone sues you for slander or libel, your umbrella policy can help protect you from the financial fallout, including legal fees and potential settlements.
3. Accidents at Home: If a guest slips and falls at your home, breaking their arm, medical expenses and legal claims could total over $500,000. If your homeowners policy covers up to $300,000, your umbrella insurance would cover the remaining $200,000, ensuring you aren’t left with a hefty bill.
4. Property Damage: Suppose you accidentally drive through a fence while backing out of a driveway, causing damage to a neighbor’s property. If the repair costs total $50,000 and your auto insurance only covers up to $25,000 in property damage, your umbrella insurance can cover the remaining $25,000.

Please contact an agent if you are interested in getting a quote on umbrella insurance.