What Does a Personal Umbrella Policy Cover?

Posted on Dec 15, 2016


For some people the idea of an umbrella insurance policy might, at first, appear to be a foreign concept. When you think about, though, the idea makes perfect sense. Just as an umbrella provides a shield between you and the unexpected storms of the world, so does an umbrella insurance policy – for many types of liability claims.

Chances are that you have a good liability insurance policy for your home and car, but you live in a litigious world, and sometimes these good policies do not provide broad enough protection to fully cover your needs.

Personal Umbrella Coverage Basics

A personal umbrella policy offers a slightly broader range of insurance protection beyond what a typical homeowner liability policy offers and includes things like coverage for libel, slander, defamation, and similar charges against you. These are things that often are not covered by a homeowner liability policy yet such extended coverage can be highly beneficial.

You should also consider an umbrella policy for additional protection if you own a dog that is considered a restricted breed by some insurance companies. If you own one of these breeds and do not have an umbrella policy you could be on the hook, financially, for medical bills and damages if your dog bites someone.

Excess Liability and Umbrella Policies

For most families, though, it is the excess liability coverage that makes a personal umbrella policy so attractive. What this means is that it provides additional liability limits on top of your primary insurance policy.  So if you exhaust the policy limits of your liability coverage for your home or automobile, the umbrella policy will kick in to provide additional financial protection for you and your family (up to the limits of your umbrella coverage).

Keep in mind that liability coverage includes protection for things like settlements and jury awards as well as costs to defend you in lawsuits, such as court costs and attorney fees. Those numbers can add up quickly – especially if there was more than one “injured party” in the event. This can happen easily if you have an apartment fire that spreads to nearby units or if you are involved in a chain-reaction accident. Insurance is about protecting you for the unexpected. Umbrella policies help provide additional financial security when the unexpected takes place.

What Doesn’t Personal Umbrella Insurance Protect?

While the protection of an umbrella policy is extremely helpful to protect your financial situation, it does not cover everything. Some of the things excluded from your umbrella coverage include your personal property, intentional criminal or harmful actions, contract disputes, business losses, etc. A personal umbrella policy also does not provide protection for business or professional liability.

The primary thing you need to understand about personal umbrella insurance coverage is that no two people have identical insurance needs. At Otterstedt Insurance Agency we understand that you have unique needs for protection and areas of concern. We will work with you to make sure you get the right coverage amount for your general liability coverage as well as to help you determine if you would benefit from a personal umbrella policy and how much coverage it will take to serve your needs best. With nearly 100 years of service to New Jersey families and businesses, Otterstedt Insurance Agency is here to help you get the financial protection you need from all of life’s storms.  Call Otterstedt Insurance Agency today at 201-227-1800 to explore your personal umbrella policy options with one of our highly trained and experienced representatives.

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