What is Umbrella Insurance?
Umbrella insurance stands as a financial safeguard, extending liability protection beyond the coverage limits of your standard home and auto insurance policies. This additional layer of security shields your assets and savings from substantial losses in the event of legal liabilities.
What Does it Cover?
The scope of coverage under an umbrella policy encompasses various scenarios, including but not limited to:
- Injury to Others: If you or a member of your household causes bodily harm to another individual.
- Property Damage: Protection against damage inflicted upon someone else’s property.
- Defamation: Coverage for legal expenses arising from defamation claims.
- Landlord Liability: Protection for landlords against potential lawsuits filed by tenants.
- False Imprisonment: Coverage in cases where you are accused of wrongfully confining someone.
Crucially, umbrella insurance not only addresses damages but also extends to legal expenses that may surpass the limits of your primary policies.
How Does it Work?
Consider this scenario: You’re involved in a car accident resulting in $600,000 worth of damages. While your auto insurance covers up to $250,000, the injured party sues you for the full amount. Without umbrella insurance, you’d be accountable for the remaining $350,000 out of your own pocket. However, with an umbrella policy, this shortfall is covered, bridging the gap between your primary insurance limit and the outstanding amount.
An Umbrella insurance policy would cover the remaining $350,000, the difference between your primary auto insurance limit and the money you would have to pay out of pocket without the umbrella insurance policy.
What Doesn’t Umbrella Insurance Cover?
- Despite its comprehensive coverage, umbrella insurance has its limitations. It typically excludes coverage for personal injuries, damages to your own property, intentional actions causing harm, and liabilities assumed under contracts.
If the security provided by an umbrella policy resonates with you, don’t hesitate to contact BMC Insurance for a personalized quote. Protect your assets and financial well-being with the added peace of mind that umbrella insurance offers!