Why Should You Purchase Personal Umbrella Liability Insurance?
Personal umbrella liability insurance provides extra layers of coverage over other insurance plans, such as homeowner's and auto. Personal umbrella plans cover several perils and shield individuals from suffering financial losses if their insurance policies cannot cover the entire claim or lawsuit amounts. Umbrella policies are sold by insurers at affordable rates but provide high amounts of liability coverage.
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Benefits
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Umbrella liability plans protect the financial and personal assets of policy owners who are being sued for damages by third parties. This type of policy covers damage or award amounts that exceed the primary plan's coverage limits. For example, if a policy owner is sued for $300,000 in auto damages and his car insurance only covers $100,000, the umbrella policy would kick in and pay the remaining $200,000. Without umbrella insurance, policy owners would have to pay the outstanding amounts out of pocket.
What it Covers
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Umbrella liability insurance covers claims of personal injury, bodily injury and property damage. The actions of family members who live with the policy owners are also covered. Even damages caused by pets are covered under these policies. Coverage is also available to insureds who work on the boards of civil, charitable and religious organizations.
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Costs
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Because umbrella liability insurance is not a primary insurance policy, individuals can purchase these plans with large coverage amounts at reasonable rates. According to CarInsurance.com, umbrella liability insurance policies with $1 million in liability coverage can cost $200 to $300 in annual premiums nationwide. Policy owners can purchase an additional $1 million of coverage for $75 per year.
Considerations
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There are claims that umbrella liability insurance plans do not cover. For instance, policy owners are not covered from damages or lawsuits arising from their intentional acts or punitive damages levied against them in court. Damages caused by businesses are also not covered. States have different laws regarding what's covered. A policy owner who has moved or is moving needs to check with his insurer as certain perils that were covered in the previous state may not be in the new location.
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References
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