Even if it’s not raining, you may need an umbrella. “Umbrella insurance,” that is. As an injury attorney who sees terrible accidents and tragedies every single week, I commend to you the idea of umbrella insurance.
Umbrella insurance is basically additional liability insurance. It is designed to help protect you and yours from major claims or lawsuits. Having $1,000,000.00 to pay out if you cause a huge loss protects your assets.
This unique kind of insurance provides additional liability coverage above the limits of your homeowners, auto, boat, ATV, and farm insurance policies. It affords more liability coverage on any rental units you may own. It kicks in when the liability limits on these other policies has been exhausted. Umbrella coverage also covers the odder claims that may be excluded by other liability policies including: false arrest, libel and slander.
Examples might include:
- Injuries to other parties due to a serious car accident where you are at fault, like rear-ending a full school bus.
- You show a gun to a guest and it goes off, causing them to lose their foot.
- Injuries sustained by a guest in your home due to a fall in that hole your son dug.
- Harm caused to the postal worker as a result of your dog attacking him.
- Damage claims incurred when your pet rips a friend’s priceless oriental rug to shreds.
- Injuries sustained by a neighbor’s child who fell off your trampoline.
- A child is found dead in your swimming pool.
- Someone trips over a crack in the sidewalk of your rental property and sues you for damages.
The odd cases of slander (an injurious spoken statement that is false) or libel (the same, only in written form) are indeed rare, but not unheard of.
Let’s say you rear-end that school bus. The cost of the injuries you cause to others is $500,000. Let’s further say that the Bodily Injury limit on your auto insurance is a generous $300,000. Your auto policy will cover $300,000 of the injuries. Your assets are in jeopardy for the rest. But your umbrella policy will cover the amount above the limit set in your auto policy, up to the limit you choose for your umbrella policy (usually $1,000,000.00).
Umbrella insurance is not that expensive. However, be aware that it requires a higher minimum bodily injury limit (usually $250,000-300,000) on your auto policy to qualify for an umbrella policy.
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