In today’s “litigation culture,” with million-dollar legal settlements all too common, anyone – including you and your family – could easily face ruin from a lawsuit, whether serious or frivolous. Even if you won, you’d be out thousands of dollars in defense costs.
A Personal Liability Umbrella can help ensure financial peace of mind by providing coverage up to an amount you’ve selected over and above the Liability limits under your Auto or Homeowners policy. Insurance companies often set minimum limits for Umbrella coverage. If you’re sued, the bulk of the settlement will come from your HO or Auto policy, with the Umbrella picking up the rest. Bear in mind that many insurers will only offer this coverage if they write both your HO and Auto insurance.
An Umbrella policy also extends coverage for you (and your family and pets) beyond basic bodily injury and property damage to personal injury, property damage, or bodily injury from a variety of exposures ranging from false arrest and defamation to invasion of privacy and wrongful entry. For example, Umbrella coverage would make sense if you own a dog that might snap or bite, or have one or more “attractive nuisances” (such as a hot tub, swimming pool, or swing set), and like to invite guests on a regular basis.
Depending on your situation, you might consider alternatives to an Umbrella policy, such as increasing Liability limits or raising your deductible under your HO or Auto policies. Also remember that Umbrella coverages vary from state to state. For example, many policies won’t cover claims for punitive damages, intentional acts, or activities related to business.
To make the best choice and make sure that you understand Umbrella coverage and any loopholes and exclusions, be sure to check with our insurance professionals.