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people need a personal liability umbrella policy. Umbrella policies
supplement the liability coverage you already have through your
home and auto insurance and provide an extra layer of protection.
They're for anyone who has assets that might be at risk if they
cause a serious accident.
If you don't have enough liability coverage to
resolve a claim or a lawsuit, the person bringing the action might
go after your home or your other assets to pay for damage. Umbrella
policies cover damage claims that you, your dependents, or even
your pets may cause.
How it works
Usually, umbrella policies take effect after the
liability insurance in your homeowners and auto policy runs out.
For example, if you have a home insurance policy with liability
coverage of $100,000, the umbrella policy will pay claims above
that amount up to the limit selected.
Additionally, it will provide coverage over and
above the amount you're entitled to under your auto policy. Because
your auto or home insurance policy will pay out first, they're considered
primary to the umbrella policy. Most of the risk is assumed under
the primary policy, which explains why the personal liability umbrella
is so cheap. You can buy a $1 million or larger umbrella policy
for less than $200 a year.
It's more than just liability coverage
When you buy a personal liability umbrella, you're
getting more than just higher liability limits. You're also buying
broader coverage in case you're sued. The company selling the umbrella
policy agrees to cover you if you cause bodily injury, property
damage, or personal injury.
It's the personal injury protection that goes
beyond the coverage in your auto and homeowners policy. Generally,
personal injury encompasses false arrest, false imprisonment, malicious
prosecution, defamation, invasion of privacy, wrongful entry, or
eviction. Most primary policies cover bodily injury and property
damage, but not personal injury. Certain umbrella policies also
provide coverage if you face liability arising from your service
on the board of a civic, charitable, or religious organization.
Protection against claims and lawsuits does more
than simply pay for the damages. Even if a lawsuit is frivolous,
you still face the expense of defending yourself. Your liability
coverage will pay for lawyer fees and defense costs, which can add
They don't cover everything
You can't protect yourself against every possible
claim or lawsuit. There will be exclusions in the umbrella policy,
just as there are exclusions in every insurance policy.
Typically, the umbrella won't cover claims arising
out of a business endeavor. If you own a business, even a small
one, you'll need to buy a business insurance policy in order to
be covered against liability claims.
Depending on the law in your state, the umbrella
policy won't necessarily pay for punitive damages, either. These
damages, above and beyond any actual monetary losses, are awarded
to punish wrongdoers for their conduct and may not be covered by
any insurance policy. Also, as a general rule, the umbrella policy
won't cover intentional acts, unless there are extenuating circumstances.
Assess your risk before buying
Although umbrella policies are relatively inexpensive,
the question remains as to whether you really need one. As with
any type of insurance, you don't want to buy unnecessary coverage.
Start by analyzing your risk of being sued.
If you have a swimming pool, trampoline, or swings
in the backyard that pose a danger. If you have frequent visitors
to your property, there's a risk of accidental falls. Maybe you're
a golfer who narrowly misses hitting someone during every round.
On the other hand, your personal situation may
make lawsuits extremely unlikely. Maybe you don't own a breed of
dog that's a threat to anyone, unless it manages to lick someone
Before making your decision, compare the umbrella
premium with the cost of raising the liability limits in your homeowners
and auto policies. Then contact Thomaston Insurance to see how we
can help provide you with the coverage that's right for your particular
For more information, call 860-283-0278