If you accidentally injure someone or damage their property, you could potentially be involved in a costly lawsuit. Verdicts amounting to hundreds of thousands of dollars are being awarded by juries across the country in increasing numbers. Even though your underlying policies may provide substantial liability limits, it is not uncommon today for juries to award damages that exceed those limits. Umbrella coverage provides you higher coverage limits and peace of mind.
Umbrella insurance is simple – it’s an extra liability policy to increase coverage and give additional peace of mind. The most common umbrella insurance policies are obtained in addition to a vehicle or homeowners insurance policy.
Umbrella insurance is specifically for personal or business liability, which is the costs you would incur if you experience an unfortunate event where you are held responsible. This doesn’t usually include your own losses, such as property damage or theft.
Basically, if your main insurance policy has liability coverage limits which are too low for your needs or comfort, you’d get an umbrella insurance policy. Umbrella insurance kicks in when your primary policy has paid out in full, and it covers the remainder of your costs which are not covered by your main policy.