13

Comments

Homeowners, automobile drives and businesses are going to need to carry liability insurance. In almost all jurisdictions it is actually legally mandated to obtain and keep liability coverage. The policies do have maximum payout  limits.

An umbrella policy is a an extension of liability insurance that will pay a liability claim that goes over the normal policy limits. It pays out under the home, auto or a workman’s compensation policy.

Insurance Policy Limits

Within the United State the coverage under the umbrella insurance policy is sold in $1 million dollar increments. The premiums are most generally going to be a lot lower than the policies for your home or your auto. The reason for this is that the claims will not be paid under the umbrella policy unless the limits of the regular policy have been maxed out.

In most cases there will be premium discounts offered to the insured that will use the same insurance company to purchase all of their liability coverage through. This insurance discount is a multi-policy discount and is offered by most all the insurance companies that carry multiple lines of insurance.

Coverage Expansion

The umbrella policy expands the coverage types offered with the other liability insurance. All of the policies will cover property damage as well as personal injury that happen due to accidents, your pets or the acts of a juvenile dependent.

The umbrella coverage is going to cover the overage of any of these if applicable but also offer a lot more than that in terms of the following:

• Libel
• Slander
• Invasion of Privacy
• False Arrest

This covers for the protection of the above charges and includes the following costs of defending; such as:

• Actual Damages
• Attorney’s Fees
• Court Costs

This type of coverage is likely to seem rather excessive; however, it is a very practical and a cost-efficient way to make sure you protect your assets. Any claim, even without merit, is going to cost you a lot of money.

If you’re a person that has a lot to lose you can’t really afford not to have an umbrella policy.

Exclusions

With all that it covers there are exclusions under an umbrella policy. An umbrella policy is not going to indemnify you against any deliberate criminal acts that you might commit. This includes but is not limited to the following:

• Assault
• Battery
• Illegal substance trafficking
• More

If you’re a business that is covered under an umbrella policy you will not be covered for any deliberate acts of corporate malpractice.

If you should have a home business it isn’t covered under either your homeowners insurance or a homeowner’s umbrella policy either. If you want to get coverage for a home business you’ll need to carry business liability insurance.

The umbrella policies that are sold for individuals are also sold for businesses and will offer all of the same basic types of coverage as the personal policies.

Final Thoughts

Our society is one that is very litigious. When it comes to lawsuits the court and jury awards are very likely to meet and exceed the limits under your policy. If you’re a person that has any significant assets you’re not only a likely target for a lawsuit but if  found liable you stand to lose it all.