Published: August 2015
You may have heard of a personal umbrella policy, but do you know what it does?
A personal umbrella policy is an optional protection that extends the liability coverage provided by an underlying policy, such as homeowners or car insurance. The extra protection can come into play — and help protect you — if you're found liable for damages that exceed the limits of your underlying policy.
Here are some frequently asked questions about umbrella policies.
Q: Is a personal umbrella policy right for me?
A: Almost anyone may benefit from a personal umbrella policy, regardless of income or assets, because accidents can happen to anyone and high costs can result. Or suppose, for instance, that you have a backyard swimming pool or a motorcycle. Certain lifestyle factors can come with additional responsibilities — and potential liabilities if you don't have sufficient protection in place. An agent can help you decide if a policy is right for you.
Read more: Personal Umbrella Policy: What is it and Do I Need One?
Q: What kinds of scenarios might a personal umbrella policy help cover?
A: A personal umbrella policy may provide protection if you're found at fault in a number of scenarios. Suppose a guest is injured in your swimming pool or while playing with your children on a swing set, you cause a car accident that results in injuries to another person or you're sued for alleged defamation after you post a negative online review. An umbrella policy may help prevent you from paying out-of-pocket for costly medical or legal bills if you're found responsible in situations such as these.
Q: What kind of coverage is available?
A: Personal umbrella policies typically offer at least $1 million in liability coverage. They are usually available in increments of $1 million, up to $5 million.
Q: Does a personal umbrella policy cover my whole family?
A: A personal umbrella policy may extend to other members of the policyholder's household, such as a spouse or children. Some exclusions may apply, though. Be sure to read your policy or reach out to your agent to learn which members of your household may qualify for umbrella protection.
Read more: Who is Covered by a Personal Umbrella Policy?
Q: Can renters benefit from an umbrella policy?
A: Anyone, regardless of whether they own or rent a home, may face a liability claim. The extra liability protection provided by a personal umbrella policy may help protect renters in the event that they are found legally liable for someone else's loss, such as medical bills or property damages. Not all insurers offer umbrella policies for renters, though. Your agent can explain what liability coverages are available to you.
Read more: I'm a Renter. Do I Need a Personal Umbrella Policy?
You probably don't expect to cause an accident and be found liable for damages. But sometimes the unexpected does occur. A personal umbrella policy can help provide a larger safety net — just in case. Contact a local agent to learn more about these policies and to help you determine what types of insurance coverage are right for you.