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What Is Umbrella Liability?

Insurance_MenRedUmbrellaIf you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage, paying for judgements against you and your attorney’s fees, up to a limit set in the policy. However, in our litigious society, you may want to have an extra layer of liability protection. That’s what a personal umbrella liability policy provides.

An umbrella policy kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy. It will also cover you for things such as libel and slander.

For about $150 to $300 per year you can buy a $1 million personal umbrella liability policy. The next million will cost about $75, and $50 for every million after that.

Because the personal umbrella policy goes into effect after the underlying coverage is exhausted, there are certain limits that usually must be met in order to purchase this coverage. Most insurers will want you to have about $250,000 of liability insurance on your auto policy and $300,000 of liability insurance on your homeowners policy before selling you an umbrella liability policy for $1 million of additional coverage.

Source: Insurance Information Institute, “What Is Umbrella Liability?” http://www.iii.org website. Accessed November 30, 2015. http://www.iii.org/articles/what-is-an-umbrella-liability-policy.html

© Copyright 2016. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

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Should I Purchase An Umbrella Liability Policy?

Houses-Buildings_Insurance_Icon_UmbrellaCoveringHouse

If you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage, paying for judgements against you and your attorney’s fees, up to a limit set in the policy. However, in our litigious society, you may want to have an extra layer of liability protection. That’s what a personal umbrella liability policy provides.

An umbrella policy kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy. It will also cover you for things such as libel and slander.

For about $150 to $300 per year you can buy a $1 million personal umbrella liability policy. The next million will cost about $75, and $50 for every million after that.

Because the personal umbrella policy goes into effect after the underlying coverage is exhausted, there are certain limits that usually must be met in order to purchase this coverage. Most insurers will want you to have about $250,000 of liability insurance on your auto policy and $300,000 of liability insurance on your homeowners policy before selling you an umbrella liability policy for $1 million of additional coverage.

Source: Insurance Information Institute, “Should I purchase an umbrella liability policy?” http://www.iii.org website. Accessed August 20, 2018. https://www.iii.org/article/should-i-purchase-umbrella-liability-policy-0

© Copyright 2018. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

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Umbrella insurance    

Money_ManHandingMoneyUmbrella insurance refers to liability insurance that is in excess of specified other policies and also potentially primary insurance for losses not covered by the other policies.

When an insured is liable to someone, the insured’s primary insurance policies pay up to their limits, and any additional amount is paid by the umbrella policy (up to the limit of the umbrella policy).

Excess insurance is similar in that it pays after an underlying primary policy is exhausted, but is different in that it 1) normally applies to only one underlying primary policy and 2) covers only those losses that are covered (up to policy limits) by that primary policy. [1] For example, if the primary policy does not cover liability due to pollution, the excess policy does not either. But an umbrella policy may cover pollution liability from the first dollar in addition to liability of other kinds that is simply beyond the primary policy’s limit. The policy is said to “drop down” to cover the pollution liability as primary insurance and fill in the gaps in the underlying policies.

The “umbrella” nomenclature is a reference to the broad coverage of the policy.

Personal umbrella policies are typically made excess of a person’s homeowner’s and automobile insurance. A commercial umbrella policy may be based on a commercial general liability (CGL) primary policy.

Examples of liability that an umbrella policy may cover that a homeowner’s policy often excludes include:

Citations[edit]

  1. Jump up^ Powerine Oil Co., Inc. v. Superior Court, 37 Cal. 4th 377 (2005).

 

Source: Wikipedia, “Umbrella insurance” http://en.wikipedia.org website. Accessed November 30, 2015. http://en.wikipedia.org/wiki/Umbrella_insurance

© Copyright 2016. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

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IN: Should I Purchase An Umbrella Liability Policy?

Dear Valued Customer,

In this issue of the “——————“ we focus on Umbrella Policies. As the name implies, an umbrella liability policy provides coverage over and above your other liability coverages. More than anything else, an umbrella insurance policy, also known as a personal liability policy, creates peace of mind.

Read on to find out why you should purchase an umbrella liability policy and how you can extend your protection through umbrella coverage. In addition, you will find the information you will need when purchasing an umbrella policy, and more.

We appreciate your continued business and look forward to serving you.

Kind regards,