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What Is Umbrella Liability Insurance, and Why Would You Need It?

umbrella liability insurance

What Is Umbrella Liability Insurance, and Why Would You Need It?

All homeowners need insurance to protect themselves from lawsuits, accidents, theft, and damage due to unforeseen disasters. However, standard plans do not cover everything and have limits. That’s why some homeowners take out multiple forms of coverage, which can be complicated. Umbrella liability is a form of personal liability insurance that simplifies coverage for complaints filed by third parties.

Umbrella Liability Insurance Defined

Since standard homeowners insurance has its limits, umbrella liability insurance exists to fill the gaps involving issues against a homeowner, such as when your pet attacks a neighbor. It also covers libel, slander, and other unexpected complaints that might disrupt your life. Even upstanding citizens can face such lawsuits by others who perceive they’ve been harmed by them in some way. Umbrella liability insurance helps ensure all bases are covered for worst-case scenarios beyond your control.

This form of broader coverage, which can run under $100 per month, protects the policyholder as well as people who live in their household. The policy covers accidental damage to other people’s property and extends beyond your homeowners insurance. It also extends beyond your basic auto insurance plan, if you cause a collision that leads to extensive property damage. Besides, it also covers certain disasters caused by your kids, including traffic accidents.
Umbrella insurance isn’t limited to just accidents or mishaps that occur in your city or state; rather, it extends to a global level. One of the ways in which insurance companies promote this type of extensive coverage is by reminding you that anyone can sue anyone for anything.

Do You Really Need Umbrella Liability Insurance?

You have to consider the value of your assets when deciding if you need umbrella liability insurance. If you are rich in assets, it’s a good idea to have this extra coverage for stronger protection. It’s especially useful if you live an edgy lifestyle that might lead to damaging other people’s property by accident. Raising young kids or owning aggressive dogs are other reasons to add umbrella coverage.

If you don’t have sufficient coverage, but you own valuable assets, it’s possible to be drained of your assets in the event of a lawsuit. In this case, you can likely afford the additional low-cost protection that will go a long way if you cause an accident that affects someone else’s property. You’ll at least have peace of mind that your insurance company will pay for such damages.

Throwing regular parties at your home sounds like a blast until someone slips and falls in your driveway and ends up with costly medical bills. You can be stuck paying those bills out of pocket if they exceed the limits of your standard homeowners policy. However, your umbrella insurance will save you from this financial fiasco instead of draining your retirement or savings account.

An alternative to an umbrella plan is purchasing endorsements to your auto or homeowners insurance. This option works when umbrella coverage is too expensive for you. It might not be as much protection, but it’s still better than nothing. You can ask your insurance agent about another option known as a bundling discount.

Scenarios Not Covered By Umbrella Liability

Like all forms of insurance, there are limits to what umbrella liability insurance covers. For example, if the court finds you have caused harm to a victim on purpose, the umbrella plan won’t cover it, and you might find yourself in bigger trouble. Umbrella liability also doesn’t cover issues related to a business or other professional endeavors. Nor does it protect you against repercussions of a contract you signed or damage resulting from armed conflicts.

Ask yourself how well you are protected from liability issues before you consider buying umbrella insurance. Contact the experts at Remland Insurance in Orange, California. Our experts will help answer questions about all your insurance needs.


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