What Exactly is Umbrella Insurance?
Umbrella insurance is additional coverage that extends beyond the limits and coverages of other policies, such as auto or property insurance.
If you don’t have the right level of coverage, your assets, home equity, retirement savings, and other assets could be at risk from personal injury and property damage claims. When you get an umbrella insurance quote from Progressive, you can add up to $5 million in additional liability protection to your umbrella policy, protecting the lifestyle you’ve worked so hard to achieve.
What Does Umbrella Insurance Protect Against?
Umbrella insurance covers claims that exceed the limits of your other insurance policies or that are not covered by liability policies. Umbrella insurance typically covers the following liabilities:
- Injuries
- Property damage
- Several lawsuits
- Situations involving personal liability
Who Needs Umbrella Coverage?
“I have auto and homeowners insurance that covers some of these situations,” you reason. True! However, umbrella insurance insures you above and beyond the limits of those policies and covers some situations that the other types of policies do not cover.
Examples of Umbrella Policies:
- The injuries sustained by another person as a result of the accident are covered by bodily injury liability. Medical bills and/or liability claims incurred as a result of injuries caused by:
- A serious car accident in which you are at fault
- Your dog causes harm to others* A visitor in your home slips and falls
- A neighbor’s child trips and falls in your yard while playing.
- Damage or loss to another person’s tangible property is covered by property damage liability. Examples include the cost of repairing vehicles and other property damaged in an auto accident in which you were at fault.
- Damage or loss to another person’s tangible property is covered by property damage liability. Examples include the cost of repairing vehicles and other property damaged in an auto accident in which you were at fault.
- Owners of rental units help protect you from liability as a landlord. Examples include the costs of liability claims incurred as a result of:
- Someone tripping on a crack in your rental property’s sidewalk and suing you for compensation
- Your tenant’s dog* biting someone and holding you liable for the injuries
You are also covered if you are sued for:
- Slander is defined as a harmful spoken statement.
- Libel is defined as an injurious written statement.
- False arrest, detention, or incarceration
- wrongful prosecution
- Shock and mental anguish
What Does an Umbrella Policy Not Cover?
In most cases, an umbrella policy does not cover:
- Your personal injuries or property damage
- A criminal or intentional action that causes harm to another
- The contractual liability you accept
How Does Umbrella Insurance Protect You?
Let’s look at an example to better understand how an umbrella policy can protect you. Assume you cause a car accident and the injuries you cause to others cost $500,000. Assume your bodily injury limits on your auto insurance are $300,000. Your auto insurance will cover the injuries up to $300,000 in total. But who is going to pay the remaining $200,000?
Your umbrella insurance policy will cover you. It will cover the amount over your auto insurance policy’s limit, up to the limit you set for your umbrella policy.
What is the Cost of Umbrella Insurance?
The cost of an umbrella policy is determined in part by the amount of coverage purchased. Other factors that may affect umbrella policy premiums include your location, the number and type of vehicles you own, whether you own multiple homes, and other items.
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