Umbrella Insurance

Understanding the aspects of an Umbrella Insurance

Umbrella insurance acts like a gap-filler for extra liabilities. The policies of an umbrella insurance will help if protecting your assets especially in major lawsuits or claims where you’re held liable for damages as a result of a home or auto accident injury. The insurance packages are designed to work in two ways:

Provide extra liability coverage above your current auto, watercraft or traditional homeowner insurance policies. The insurance comes into play when all avenues of the other policies’ limits have been fully exhausted.

It can also come in handy in situations where the claims you’re facing have been excluded by your liability policies. For instance, it can cover claims such as libel, false detention or arrest, slander, and liabilities on your rental units.

What does it cover?

The insurance offers rates that can provide cover for liabilities such as:

Damage to personal property

Accidental injuries


Other liabilities that are far above and beyond the coverage of other insurance policies’ confines.

Types of coverage and how they work

1) Property Damage Liability – Designed to cover liabilities caused to other people’s personal property like:

Damage to another person’s vehicle due to an auto accident that you were at fault.

Damage caused to your neighbors’ property by your pets.

Damage caused to school property by your child’s fault.

2) Owners of Rental Units – This is coverage for liabilities that you may face as a landlord including:

Being sued by an individual who tripped on the sidewalk due to a crack on your property.

Damages or injuries caused by your tenant’s pet on another person.

3) Bodily Injury Liability – Covers for the damages caused to another person’s body. It will cover the medical bills or liability claims arising from:

Injuries sustained by your guest while at your property.

Injuries sustained by children playing in your backyard.

Bodily injuries that were sustained in a road accident where you were at fault.

It’s always advisable to read your insurance policy contract and understand all the details or even contact your insurance representative for further consultations to avoid costly lawsuits. Understanding the general information and descriptions or provisions stated in your insurance contracts will help you evade losing your assets.