As the name implies, umbrella insurance provides overreaching coverage beyond that of other insurance policies and fills in the gap. It can be especially important for high net worth or very visible people, as they are seen as attractive suit targets.

Umbrella insurance is designed to help protect policy holders from large and potentially devastating liability claims or judgments. If other liability limits such as those with a homeowner’s or auto insurance policy have been reached, then umbrella insurance would come into play. 

Typically an umbrella policy would cover bodily or personal injury, property damage and landlord liability. It’s not designed to cover personal belongings, business losses, intentional or criminal acts or omissions or written or oral contracts.

If there’s an accident that you’re involved with and found responsible, this type of policy can keep you from having to pay for medical or legal bills, up to your policy’s limit. Other accidents could include swimming pools or other activities at your home. Another benefit is that umbrella insurance usually covers other members of your household, like a spouse, child or other relatives. If for example, your teen posts a libelous comment online, a policy of this nature may offer protection.

It’s also important to remember that damages may go beyond medical and could include loss of income if you are deemed responsible in an accident. If the other driver’s injuries are severe, you may be legally responsible for damages beyond the $250,000 your car insurance policy covers, for example. And, if you’re sued, your personal assets could be at stake. Imagine if that injured driver were a highly paid professional and it kept him or her out of work, you could be responsible for damages much beyond just the medical. 

It’s also important to note that umbrella insurance, although similar, is not the same as having excess liability coverage. For example, umbrella insurance can help pay for a libel or slander judgment, while a standard homeowner’s liability coverage, even with excess liability coverage, probably will not. Please feel free to speak with our office on all the benefits and features of an umbrella policy through PRA Insurance.