It is unlikely that you will lose the case by more than the amount your current insurance pays – but if you ever find yourself in this situation, you may lose all your savings. Umbrella insurance is designed to ensure that you never find yourself in this nightmare. Are umbrella insurance policies worth it?
What is umbrella insurance?
Umbrella insurance is a type of third party liability insurance that may be necessary when you are liable for claims greater than homeowner’s insurance or auto insurance. If you own a boat, you will also take your umbrella insurance where the vessel liability insurance ends.
Umbrella insurance even covers some compensation claims that policies may not cover, such as libel, slander and false prison. And if you own a property for rent, umbrella insurance provides liability insurance that goes beyond your tenant’s policy.
The types of damage covered by the umbrella policy include:
- Bodily injury. If you hurt someone in a car accident and your medical bill exceeds your auto insurance limits, the umbrella policy will pick up your card. Similarly, if an electrician slips and falls down the stairs when leaving the house, the umbrella policy covers all medical bills that go beyond the limits of the homeowner’s policy.
- Property damage. If your teenager breaks the family car over the fence and to the side of the neighbor’s house, an umbrella insurance policy can pay for any damage that goes beyond the scope of auto insurance.
- Other types of legal damage. An umbrella insurance policy protects you if you are sued for libel or slander – written or spoken words that cause injury to someone else.
- Legal fees. The last advantage of umbrella insurance is that it cares for legal fees and court costs in the process. Lawyers are expensive, and the cost of an important trial can force you to settle out of court, even if you know you are not really guilty.
Do I need umbrella insurance?
Today, processes are everywhere. Lawyers grant larger amounts than ever before.
Homeowners, cars, and watercraft policies have a limit on liability insurance. Liability insurance is part of your home or car policy that covers costs such as:
- Medical bills
- Rehabilitation therapy,
- Lost remuneration due to negligence of the guilty person.
Part of the liability of the insurance policy also includes legal defense. After adding up all the costs of wounded treatment and legal fees, the standard responsibility of the homeowner or car policy is often not enough.
Almost every state has financial liability laws that hold drivers liable for personal injury and material damage resulting from car accidents, and a driver who has committed a fault may be sued for damage. Personal property can also be seized as a result of a lawsuit. Similar provisions apply to homeowners and watercraft owners.
Umbrella insurance protects you when you are sued after an event that has taken place at home, in the car or because of something you did. You really can’t go wrong with umbrella insurance, especially in our current climate, which loves processes.