You never know when an accident or lawsuit could turn your life upside down, and you don’t have to be a millionaire to get sued like one. We created an Umbrella Policy guide to help you. Imagine this scenario to see how umbrella liability insurance can be useful:
Your spouse accidentally runs a red light and T-bones another car. There is substantial damage to the vehicle, and several people are injured. The vehicle needs $25,000 in repairs and treatment of the injured totals $275,000. Also, the driver of the car your spouse hit is a plumber who won’t be able to work for months due to a broken wrist and leg. He is suing you for $200,000 in lost earnings.
Now you are looking at a total of $500,000. If you carry only $300,000 in liability coverage with your car insurance, the remaining $200,000 will have to come out of your pocket.
If you had umbrella insurance, it would pay the difference between what your primary insurance covers and what you still owe. An umbrella policy could also cover your legal costs in the lawsuit. A one-million-dollar policy can cost less for an entire year than the average hourly rate of a decent lawyer.
What is an Umbrella Policy?
Also known as Personal Catastrophe Liability (PCL). It acts like an umbrella over your other policies, giving you additional protection beyond your standard insurance policies. It provides extra coverage to safeguard your assets and defend against potential financial hardships from costly accidents, injuries, or lawsuits that exceed the limits of your existing policies. It covers the legal expenses for your defense up to the policy limits. It also provides the necessary support and resources to navigate legal challenges and protect your assets – whether or not you’re found guilty.
Who should consider an Umbrella Policy?
If you have any assets to lose, you need an umbrella policy. Accidents happen every day and they can lead to costly legal battles. The courts are awarding larger amounts than ever before—many reaching millions of dollars—in liability cases involving injuries and property damage. Everyone is at risk, especially if you fit into any of the following categories:
- Owners of swimming pools, hot tubs, trampolines, rental properties, boats, jet skis, motorcycles, farms, large dogs, or expensive cars.
- Parents of teenage drivers or parents who carpool children around.
- Sports participants such as little league coaches, referees, umpires, hunters, skiers, golfers, or scout leaders.
- Volunteers of church groups or civic organizations.
- Anyone who is affluent or is perceived to be wealthy.
What Does an Umbrella Policy Cover?
An umbrella policy offers extra coverage in several key areas such as bodily injury to others and property damage caused by you or a loved one.
- Expenses for legal defense in lawsuits
- Cases involving false arrest or imprisonment
- Situations related to wrongful eviction or unauthorized entry
- Violations of privacy rights
- Damages to someone else’s property
- Dog bite claims
- Your teenager can be sued for an online comment posted online
- Bodily injury to others
Umbrella insurance covers various incidents in addition to this list, including incidents outside the U.S.
The Cost of Umbrella Insurance
Annual umbrella insurance typically costs the same as one hour of legal defense, making it well worth the price. While the price can vary, you’ll save money if you bundle your policies all with the same company.
What Isn’t Covered by an Umbrella Policy?
Umbrella insurance won’t cover damage to your personal property or liabilities related to your business. It also doesn’t cover damage caused when you commit a criminal act or liability assumed through contracts made before an incident occurs.
Generally, umbrella policies only cover exposures your underlying policies already cover. So, it’s important to make sure you have a good understanding of your current policies when considering an umbrella policy and determining what it will cover.
Gerety Insurance – Partners for Your Protection
When it comes to protecting yourself from financial loss in the case of a catastrophic event, Gerety Insurance is your partner for protection. With a focus on trusted, local services, we offer personal attention and a reliable partnership for safeguarding your life, loved ones, or business.
Finding affordable coverage should be easy, but unfortunately, that isn’t always the case. That’s why we pride ourselves on being accessible and responsive, ensuring the help you need is always within reach.
With over 25 years of serving Harford County, MD, and beyond, we’re committed to helping clients maintain the right coverage at the right price, year after year. You can request a quote today and find a reliable partner for your protection.