Why You Should Consider An Umbrella Insurance Policy

In today’s litigious environment, a simple accident or oversight can escalate quickly into a personal liability lawsuit, potentially putting your assets at risk. Auto and homeowner’s insurance policies generally provide some liability coverage, but when legal costs and damages pile up, these standard limits can be easily exceeded. That’s where umbrella insurance can be a valuable safeguard, offering an extra layer of protection for your assets and your peace of mind.

What Is Umbrella Insurance and How Does It Work?

Umbrella insurance, also known as personal excess liability coverage, is designed to step in once the liability limits on your existing auto, homeowner’s, or renter’s policy are reached. This additional coverage can help pay for legal fees, medical expenses, and damages if you are found liable in a lawsuit.

Generally, umbrella policies cover:

• Bodily injury: Protects you against liability for injuries you are found responsible for.
• Property damage: Covers any liability for damage to another person’s property, including vehicles and homes.
• Medical payments: Provides coverage for medical costs such as emergency room visits or ambulance fees not covered by other insurance.

Since umbrella insurance takes effect only after the primary policy limits are exhausted, insurers may require you to carry a certain amount of liability coverage on your base policies—sometimes up to $250,000 for homeowner’s liability coverage.

Who Can Benefit Most from Umbrella Insurance?

Umbrella insurance is especially useful if you:

• Own a swimming pool: Pools can be a significant liability risk. The CDC reports nearly 4,000 annual drowning deaths in the U.S., with children under four at the highest risk. A pool-related incident could easily exceed a typical homeowner’s policy limits.
• Have a dog: Dog bites and related incidents often lead to costly liability claims. While many homeowner’s policies provide basic coverage for dog-related injuries, the limits may not be enough if a claim goes to court.
• Own recreational vehicles: Snowmobiles, ATVs, and similar vehicles are associated with high injury risks. Even if friends or family are the only ones riding, you could be liable if someone gets injured or causes property damage.
• Serve on a nonprofit board: Serving as a volunteer board member can expose you to personal liability for the nonprofit’s actions. Umbrella insurance can provide protection in cases where personal policies may not cover board-related risks.
• Write online reviews or blog: Defamation lawsuits are increasingly targeting bloggers and online reviewers. Most standard homeowner’s or renter’s policies don’t cover libel or slander, but an umbrella policy can protect you if your writing leads to a legal claim.
• Are retired or on a fixed income: If you’re no longer earning a steady income, one major claim could seriously impact your financial stability. Umbrella insurance provides an affordable option to protect your assets and retirement savings.

How to Obtain Umbrella Insurance

For those interested in bolstering their financial protection, umbrella insurance policies typically range from $1 million to $10 million in coverage, available for a modest premium. To learn more about adding this additional layer of security, speak with your HUB representative to determine the right coverage for your unique needs and risk profile. Umbrella insurance may be the financial umbrella you need to weather unexpected storms.