With so many different insurance coverage types around, it can be challenging to decide which one to get. Which kind of insurance coverage will help secure your whole family’s future? Your knowledgable insurance broker would advise you to get personal umbrella insurance for adequate protection.
A personal umbrella insurance policy covers both liability and defense-related costs. It acts as an extension of your existing policy and protects you from instances that your primary insurance does not cover. It can also provide additional coverage beyond the limits of what was set in your primary insurance.
NM Personal umbrella coverage provides additional liability insurance coverage that extends to the homeowners’ insurance or auto insurance limits.
Common claims covered
To better understand how personal umbrella insurance works, let’s look at the common claims:
1. Homeowners liability
Personal umbrella coverage can raise the limit of coverage on your home and property insurance.
2. Defense costs
When you get sued for whatever reason, you would typically have to pay for high attorney’s fees and processing expenses. Such costs can quickly add up to a massive amount while the trial is ongoing. Personal umbrella coverage can help pay these fees.
Suppose you are found at-fault and asked to pay for damages. In that case, the unused portion of your umbrella insurance after deducting the defense costs can cover the associated liability expense you owe.
3. Pain and suffering
You can get sued for causing another person to experience pain and suffering. Such a situation might result in an extra cost outside of the person’s bills or other expenses incurred by the other person. For example, the person claims to have suffered psychological stress resulting from the incident. Pain and suffering can be one of the most expensive liability coverage you will ever encounter, costing millions of dollars in some instances. Your umbrella insurance can help cover such costs, especially since the minimum umbrella limit is $1 million.
4. Teenage driver
Having a teen driver in your household might urge you to consider purchasing umbrella coverage. You are required by the law to have auto liability insurance, but it may not always provide full liability coverage in case of a severe accident where you or your teen driver are found at fault.
The accident risk is 3x higher for 16-19-year-olds, with 8-10% of yearly fatal crashes involving teens. This scenario creates a higher risk and higher liability. Adding personal umbrella coverage extends your auto liability limit to protect against these risks.
Having a teen driver also raises your insurance premium. It would be more cost-efficient to purchase an umbrella policy to get additional coverage at a lower cost instead of adding that line of liability on your primary auto insurance.
5. Intoxicated party guests
Suppose you had a celebration at your house, and one of your guests has had too much alcohol. He then drives home intoxicated, causing an accident on his way home from your event. Depending on your area’s state laws, you could become partially liable for your guest’s expenses.
A lawyer could claim that you failed your due diligence as a host. The claim could specify that you over-served alcohol, allowed an intoxicated guest to drive away rather than having the guest stay for the night, or bring him home. Such an indirect form of liability is something not usually covered by your regular homeowner’s insurance. Having personal Umbrella coverage can help protect against this type of claim.
6. Malicious prosecution
Malicious prosecution is the filing of a civil or criminal lawsuit for an improper purpose or probable cause. If a wrongful prosecution ends in the defendant’s favor, he can file a case for the wrong he has suffered.
Personal umbrella insurance helps you defend yourself in the case of false arrest, imprisonment, defamation, or eviction, resulting in a damaged reputation. Umbrella coverage can also help pay for you to regain your reputation. Your typical insurance does not cover these kinds of situations, but umbrella insurance can help.
7. Dog bites
Take this as an example: You take your dog out for a walk, and for some reason, he bit a passerby. This person can sue you for the medical expenses, plus lost wages and even pain and suffering he experienced resulting from your dog’s bite. Such incidents are additional scenarios that may not be covered by your homeowner’s insurance. But umbrella coverage could help pay for the costs.
If you actively volunteer for activities for charitable or religious organizations, you might need additional insurance. Even when you intend to do good, you might be sued for negligence or inappropriate behavior while volunteering in such events. Some charitable organizations will help pay for the claims, but the individual can still come after you directly. When offering to volunteer for community projects, make sure all organizations you work with have some form of insurance coverage.
Below are the benefits of having personal umbrella insurance:
- It covers claims over regular homeowners, auto, or watercraft policy coverage.
- It also provides coverage for other members of the family or household, aside from the insured.
- It covers injury to others or damages their possessions, but it doesn’t protect the policyholder’s property.
- It is usually cheaper to get umbrella insurance compared to other types of insurance.
About Daniels Insurance, Inc.
At Daniels Insurance, Inc., we have a unique understanding of the risks that businesses like yours face on a regular basis. With the backing of our comprehensive coverages and our dedication to customer service and quick claims resolution, your business will be fully protected. For more information, contact us today at (855) 565-7616.