THURSDAY, MARCH 16, 2023
You need to have liability insurance on many of your personal insurance policies. It is there to help you in case you ever cause harm to others. However, there is no guarantee that the costs you owe someone will stay within the limits of your policy. Still, you might be able to have additional help if you buy personal umbrella insurance. Here’s how it works.
Understanding General Liability & Umbrella Insurance
When you have a car wreck, you might be the person who is at fault for the wreck. Or, when you have guests in your house, someone might fall and claim you were responsible for their injuries. As a result of your mistakes or negligence, you might have to be the person who repays them. That’s why most homeowners and auto insurance policies include liability insurance. This is the coverage can help you pay them without a significant personal financial loss.
All liability policies will pay up to a maximum limit for any given claim. However, should a claim value exceed the policy limit, then you might face the risk of having to pay the remaining costs on your own.
To eliminate this risk, consider investing in umbrella liability insurance. It can pay when liability claims exceed the limits of a standard policy. It can offer you three types of extended benefits:
Higher Coverage Limits
Most umbrella liability policies offer at least $1 million in additional liability coverage. So, though your standard auto insurance might only offer up to $500,000 in coverage, umbrella coverage can increase that limit. You might have up to $1.5 million in liability assistance.
Expanded Coverage Scenarios
Standard liability insurance often limits the scenarios in which it will pay. For example, some standard homeowners policies don’t cover you if your pet bites someone else. However, you might be able to get this extra coverage through your umbrella policy. In this case, the umbrella policy will pay for all the claim.
Some liability policies split the limits of how much they will pay for certain types of claims. For example, your auto policy might pay a maximum of $50,000 for third-party property damage and $100,000 for bodily injuries. Umbrella policies usually do not have this design. Therefore, you can make umbrella claims flexibly without worrying about any sub-limits. However, don't forget that if you include several types of liability damage on a single claim, the policy limit will still apply.
Work with your agent to determine what you need to do to get the appropriate umbrella policy. If necessary, they can help you increase your standard liability policy limits to make them qualify for umbrella coverage.
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