A Personal Umbrella policy, or simply an Umbrella, is meant to help protect you from large and potentially devastating liability claims or judgments. Personal umbrella coverage comes into play when your aggregate underlying liability limits, from a homeowners or auto insurance policy, have been reached.
What Is Typically Covered by an Umbrella Insurance Policy
- Bodily injury
- Personal injury
- Property damage
What Is Typically Not Covered by an Umbrella Insurance Policy
- Personal belongings
- Business losses
- Intentional or criminal acts or omissions
- Written or oral contracts
Umbrella policies can benefit almost anyone because accidents that result in high costs can happen to anybody. An umbrella insurance policy can help prevent you from paying out of pocket for another person's medical or legal bills if you are found responsible. For instance, suppose you are found liable after a guest is injured while swimming in your pool or playing in your yard. Or suppose you are found at fault for a car accident that injures another person. An umbrella insurance policy can help cover your resulting expenses in situations like this up to your policy's limit.
Umbrella insurance also typically extends to other members of your household, such as your spouse, children and other relatives who live in your home and who do not have auto or property insurance in their own name. So, if your spouse causes a car accident or your teen is sued for posting a libelous comment online, your umbrella insurance policy may help protect them, as well.
An enhancement to an Umbrella Policy is an Under-Insured/Un-Insured Driver Coverage (UM/UIM).
This enhancement allows your Umbrella to cover your own losses in a situation where you or your household members are injured by an uninsured driver, or one who has coverage that does not cover injuries or losses sustained.
This coverage is provided for additional charges but can be so valuable if you are caught up in this all-to-typical situation.
Suppose your high-school son is riding with his friend in the new BMW his is folks just bought him. The car is insured at the California State minimum of $15,000/$30,000 for bodily injury. There’s an accident. The fault lies with your son’s buddy, but your son is the one hurt. He’s going to be alright, but the hospital bills quickly mount to $200,000. Physical rehabilitation is in his future. The driver’s insurance, at $15,000 is wholly inadequate. You can sue the driver’s parents, but that takes time and money. You need funds now for his recovery. Your Umbrella policy, with the UM/UIM enhancement lets you tap that $1,000,000 in coverage. The Umbrella policy gives you and your family the “breathing room” to recover, to heal.