You may be wondering, “Do I really need an umbrella policy?” The short answer is: yes.
Although many people consider umbrella protection as a supplementary insurance compared to home, car and even life insurance, the safety net provided by this unique type of insurance is anything but optional for many.
In this article, we will review everything you need to know about umbrella insurance – from who it is for to how much it costs – and explore some of the unique features that differentiate Central Insurance’s umbrella insurance.
What is umbrella coverage?
A personal umbrella policy is designed to provide an extra amount of liability insurance coverage and a wider range of coverage than ordinary homeowners, car insurance and other types of personal insurance.
“It is important to remember that an umbrella policy is the responsibility of others,”; said Stephanie Olsen, Senior Personal Lines Product Development Specialist at Central insurance. “It will not cover your own injuries or personal injuries …[nor] it will cover exposures of the business liability type. “
Instead, she explains, there are umbrella policies primarily to protect your assets.
“In the event of a claim or lawsuit for which you are responsible, if the limits of your car or home policy are insufficient … you may experience financial repercussions, including your personal assets used to satisfy the lawsuit.”
With an umbrella policy in place, “if there is a large claim for which you are responsible, the umbrella policy would pay up to these limits,” she says.
Usually these policies extend your liability limits from $ 1 million to $ 5-10 million in addition to the limit of liability contained in your other personal policies.
Who needs umbrella insurance?
“There are few people who do not need an umbrella policy,” Olsen explains. “If you drive a car, own a home, have a pet, have guests in your home or have a new driver in the family, you should not be without this extra layer of responsibility.”
This is because, she continues, tragic and unexpected accidents can happen to anyone at any time, and it is important that you have the coverage you need to protect yourself if they do.
For example, “about 30-40 percent of all our car insured have an umbrella policy [at Central], Olsen explains. “And we always recommend that extra responsibility … especially for those who have an older or new driver in the house.”
This is because the CDC has found that risk of accidents with motor vehicles is higher among teenagers aged 16-19 than they are with any other group, with reference to the fact that “per mile driven, teenage drivers in this age group are almost three times as likely as drivers who are 20 years or older to have a fatal accident. . “
Liability for car accidents caused by new or older drivers is not the only type of unexpected situation where umbrella insurance can help.
Olsen explains, for example, that there have been situations where a policyholder walks across the street as a pedestrian and is hit by a car, but the driver does not have his own insurance. In this situation, “if [our policyholder] had uninsured motorists on their umbrella coverage, their damages would be fully covered by both their underlying car policy and their umbrella policy together.
Another incident that Olsen happened to recently where umbrella insurance came into the picture, was when a young man took his parents’ boat out for a car trip without a permit. One of his friends fell off his back and his leg was badly injured in the propeller. Although the young man’s parents were not directly involved in the incident, they were considered libelous for the accident because they were the owners of the boat. Fortunately, the parents were able to lean on their umbrella cover to cover the unexpected claim. Had they not had such coverage, they might have had to sell their personal assets to cover the costs.
“If a situation arises and you do not have that layer of umbrella coverage to protect you, your wages may be guaranteed [or] you can lose your home, says Olsen. “Simply put, you have to find some way to cover the difference [between what your current policy covers and the amount you owe]. Your umbrella insurance should be the stock for you. ”
How much does umbrella protection cost?
Although the cost of umbrella protection may vary from company to company, at Central an average premium varies between $ 150 and $ 175 per year. “This is a relatively cheap investment of one million dollars in coverage,” says Olsen.
What is not covered by an umbrella policy?
Despite the dozens of opportunities that policyholders have to avail their umbrella cover, it is important to note that it is not applicable in all situations. Below we have compiled a list of some of the most common incidents that are not covered by your umbrella insurance.
1. Things that happen directly to you, your home, your car or your property.
2. Intentionally illegal behavior or criminal acts.
3. Intentional damage to people or property.
4. Contracts entered into knowingly by both parties.
5. Damage to business or business-related property.
Remember: A commercial umbrella policy is required to cover costs related to corporate responsibility.
It is also important to remember that anything that is explicitly excluded from your insurance – such as injuries caused by certain dog breeds or from specific recreational vehicles – will not be covered by the umbrella insurance.
Who has the best umbrella insurance?
Although there is something to be said for each unique umbrella insurance, we at Central believe that we have developed a system that can meet our policyholders exactly where they are and provide the coverage they need to feel safe.
Olsen explains, for example, that there are two types of umbrella insurance on the market today: one is considered to be one excess liabilityand the other a real umbrella. Where excess liability is designed to cover losses that exceed the limit of your primary insurance, genuine umbrella insurance offers both higher liability limits and extended protection of areas that an underlying insurance may not congenitally cover.
“At Central, our umbrella cover is considered a true umbrella,” she says. “So in a situation that establishes your umbrella policy, your coverage will drop to the first dollar of that claim. With excess liability, there is a payment amount that you must meet first before that protection begins.”
Central also offers exceptional coverage at reasonable prices with its Summit Personal Umbrella Policy Package designed to add a range of unique additional coverage to the usual umbrella policy.
In addition, Central offers Coverage for uninsured / uninsured drivers for your personal umbrella policy, which can protect you from having to pay for personal injury expenses caused by another driver without insurance out of pocket.
Read more about Central’s umbrella policy hereand get in touch with an agent today to explore your coverage options.