The name umbrella policy shouldn’t confuse you. The umbrella insurance or policy isn’t capable of protecting all types of storms. Before purchasing an umbrella policy, you need to know what is not covered by an umbrella policy.
Excess liability insurance is another term used in describing umbrella policy, and this is simply because it is an added form of liability coverage. It is the insurance policy used in covering liability where you are held legally responsible for another person’s damage.
The umbrella policy is used in supplementing all other basic liabilities that you have, like the renters, home, and auto insurance policies. However, this insurance policy is optional, but the umbrella policy is known to have or provide a higher limit when compared with the standard policy plan.
When planning to purchase the umbrella policy, you should understand what is not covered by an umbrella policy and what it covers.
What Is Not Covered By An Umbrella Policy
What An Umbrella Policy Includes
The umbrella insurance policy is known for covering liabilities. We all know that if another person gets injured while on your property or in an accident where a person gets injured, and it’s your fault, then the other party involved here is within their legal rights to sue you for damages.
We refer to liability, and you are also responsible for the payment of damages, hospital bills, and other forms of expenses. We have listed below what the umbrella insurance policy covers;
- Funeral costs of the other person involved
- Expenses or medical bills of the person injured
- Lawsuits that involves defamation and slander
- Your own legal defense costs
- Property damage by a tenant or tenant injuries if you own a house
In terms of liability protection, the umbrella policy starts at about one million dollars, and it is important because it helps protect homeowners and drivers. When compared to another type of insurance, you will also realize that the umbrella policy has a lower premium cost.
What Is Not Covered By An Umbrella Policy
If you have the homeowner, auto, or another insurance form, you will purchase umbrella insurance. It is simply because umbrella insurance is a supplemental policy and not one that can be considered a standalone policy.
Setting up a certain limit on your auto or homeowners insurance paves the way for you to add the umbrella policy to what you have already had. Despite all these, umbrella insurance still doesn’t cover everything. Here are the things that it doesn’t cover;
- Damage that happens to your personal belongings
- Injuries you sustain
- Criminal or intentional acts
- Damages or injuries that your business can be held accountable for
- Injuries or property damages in some situations like the use of uncovered dog breeds or uncovered recreational vehicles
From all that we have listed out, you can actually tell that the umbrella policy isn’t active in covering your own costs. Still, it becomes active when you are sued for damages or held responsible for another person’s damage.
Whatever that isn’t part of your coverage, the umbrella policy would not cover for it. You should also know that the personal umbrella liability would not cover your business.
The truth is not everyone needs an umbrella policy because it really isn’t necessary. If your standard insurance covers your home, your car, and all other sufficient liability coverage, then you do not need an umbrella insurance policy.
Furthermore, if you have something to do with a business or event that would put you at risk for personal liability, then you might actually need to get an umbrella policy. The umbrella policy is considered a good defense tactic if someone would ever consider suing you for any damage.
Let us face the facts here, anybody can also benefit from the umbrella insurance policy because at the end of the day, if you do not play smart, having a lawsuit slammed against you can ruin all that you have worked for.
The little annual fee that you would pay for having the umbrella insurance policy is nothing compared to the peace of mind you would have when you are not worried about losing your home or car or even leaving you in debt.