Demystifying Umbrella Insurance: FAQs and Helpful Tips
The liability component of a standard policy, such as auto, home, or renters insurance, has a definite limit. Purchasing an umbrella insurance policy can cover liabilities beyond such limits. It helps to protect your assets if you’re liable for “excess” third-party injury or property damage liability. Here’s what you need to know to maximize your liability protection with an umbrella cover.
What is the Cost of Umbrella Insurance?
A $1 million umbrella insurance policy costs between $150 and $200. However, doubling the coverage to $2 million doesn’t double your premiums.
Are Umbrella Insurance Premiums Tax Deductible?
Your premiums may be tax deductible for commercial umbrella insurance as a business expense. This isn’t usually the case with a personal umbrella policy. That said, covering your excess rental property liability under personal umbrella insurance may qualify the premiums for tax deductions.
How Much Umbrella Insurance Do I Need?
To estimate your umbrella insurance coverage, consider factors such as:
What Type of Excess Liabilities Does Umbrella Insurance Cover?
Umbrella insurance supplements your primary liability coverages, such as:
- Malpractice insurance
Useful for professionals like lawyers and doctors, an umbrella policy can cover a third-party claim amount above your malpractice insurance liability limit. When choosing your excess liability deductible, consider your malpractice policy limit to avoid a significant coverage gap for which you’d pay out of pocket if there’s a lawsuit against you.
- Water damage
Although umbrella insurance doesn’t cover floods, it might reduce certain water damage liabilities. It certainly can supplement your rental insurance liability. So if you forgot to turn off your bathtub and overflowing water-damaged expensive furniture belonging to a fellow tenant downstairs, your excess liability protection might come into play.
- Liability lawsuits
Compensatory damages against you (or an out-of-court settlement) can sometimes exceed your primary liability policy limits. Umbrella insurance is one of the most cost-effective ways to cover any extra bodily injury or property damage liability.
- Landlords insurance
If you own rental property, it’s a good idea to carry an umbrella insurance policy. It can protect you against excess liability claims from guests injured on your property, such as in fall accidents due to defective stairways, pool accidents, and more.
- Professional liability insurance
Do you work in a sector like psychology, financial planning, or investment consultancy? You may carry professional liability insurance to cover “bad advice” lawsuits by clients. Umbrella insurance will supplement this primary coverage if you face excess errors and omission liability claims.
Get The Right Protection for Your Assets with Umbrella Insurance!
An umbrella insurance policy can be useful for expanding your primary liability coverage to protect your assets fully. If you need expert assistance auditing your risks and assets, contact us at Remland Insurance today. We are happy to help you find the right coverage amount for your liability risks.