But what about coverage for the things that cannot be bought at a store, put a monetary value on, or be replaced? For instance, things such as financial protection for the future, maintaining an accustomed standard of life, sustaining a good quality of life, and of course peace of mind. This is where this policy comes in.
A personal umbrella insurance cover will augment the coverage you already have on your home and vehicle, just by paying a small premium, thus, providing you and your assets an additional level of protection. So, why would you need this extra layer of protection? Well, it’s always best to be prepared in case you are sued for a higher amount than covered by your existing policy. For, if that were to happen, your whole lifestyle could be jeopardized.
Many people have the misconception that these policies are only meant for the affluent. As a matter of fact, just about anybody who could be subject to legal action as a result of causing serious injury to somebody-whether the injury is caused by your child, your pet, or you-can avail themselves of this policy. For example, if your child’s friend should be seriously injured while playing in your backyard, or if your dog should attack your neighbor, or if a guest should be injured due to faulty construction in your home, this policy will help you to overcome the legal threat without jeopardizing the finances meant for your future.
What is covered:
- Legal judgments that surpass the limits of liability coverage provided by the policies on your home and automobile. Put differently, the primary policy you have, would pay the maximum damages it covers for, while this cover will pay for the overages, if any.
- In the event that you, your child, or your pet causes another person bodily injury, damage to his property, or damages in the form of slander or libel.
- Costs involving hiring defense lawyers and legal fees.
What is not covered:
- Judgment awarding compensation, which exceeds the actual damages, as a form of punishment for willful or malicious misconduct.
- Claims of liability regarding your own business, for which you will require a business insurance policy.
As you would with any other investment, it is recommended to acquaint yourself with the inclusions and exclusions involved, to find out if it is the kind of coverage you need. This will also help you to decide whether you want to simply increase the liability coverage on your home and automobile policies, or go in for the extra cost of an umbrella policy. The best way to do this is to make a comparison of the cost and features, assess your risks, and work out your risk tolerance. This will help you to make an informed choice.
If you decide to opt for a personal umbrella insurance policy, it is best to consult your agent who maintains your present homeowner’s and automobile policies. There are high chances of him or her providing you the most seamless service and the best rate, which means that you won’t have to deal with various insurance companies squabbling over which one should bear the liability. However, in order to compare the rates, it is advisable to check with other agents to find out about their fees.
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