If a neighbor's child gets hurt in your swimming pool, an umbrella policy to cover liabilities that go beyond your homeowner's policy may save you from financial ruin. | Pexels
Umbrella insurance provides a person with a policy for coverage that goes past the limits of other policies and can provide coverage for personal liability situations, certain lawsuits, injuries and property damage.
This second layer of protection can be important in cases where you are at fault in a serious auto accident, your pet harms others, a guest in your home falls or a neighbor’s child gets hurt playing in your yard, GEICO reported.
When disaster strikes for a Floriday homeowner, a relatively inexpensive umbrella insurance policy with $1 million or more in liability protection can keep your assets safe, Bankrate reported.
Umbrella policies start coverage where the insured’s limited liability coverage ends, Bankrate reported.
Default liability coverage of $100,000 to $300,000 is standard for a homeowner's policy, Bankrate reported. Insurance carriers generally allow policyholders to increase their liability coverage limit but even with increased limits, the costs could exceed that coverage.
If someone gets seriously injured or even drowns in your swimming pool, the medical and legal costs could easily exceed standard limits. Once the homeowners’ policy limits were reached, the umbrella coverage kicks in to cover the remaining costs, up to its limit of $1 million or more.
People who rent summer vacation homes may find an umbrella policy necessary because it can protect properties you don’t own. If someone starts a fire in the rental home’s kitchen or burns down the deck, the umbrella policy may cover its replacement, Bankrate reported.
An umbrella policy can also protect the properties you use but don’t own. For example, if you rent a home for summer vacation and accidentally burn down the deck while barbecuing, your umbrella policy may pay to rebuild it.
With an umbrella insurance policy, you can extend the coverage provided through homeowner’s, auto and boat policies, Wiglesworth-Rindom Insurance Agency reported.
An umbrella policy can cover bodily injury liability and property damage liability including damages to vehicles and other property in an auto accident when you are at fault, GEICO reported. Owners of rental units can get coverage for liability faced as a landlord, such as someone injured on the rental property or even if a tenant’s pet bit someone with you held responsible for medical bills.
Other coverage provided under an umbrella policy can include slander, libel, false arrest, malicious prosecution and shock or mental anguish.
The cost for an umbrella policy with $1 million in liability coverage costs $150 to $300 annually, the Insurance Information Institute said. Factors such as a home’s age, location, safety and security features and your claims history will affect the cost.
Homeowners with properties that have greater liability risks, such as pools and trampolines, should consider an umbrella policy to be sure liability coverage is sufficient, GEICO said. Even a yard with tall trees can trigger the need.
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