Perhaps, you have been repairing your outside deck and patio due to the wood becoming old and rotten. You mean to finish this job quickly, but it drags on. One day, you invite a friend over. He wanders onto your deck and falls through it. He badly injures himself and sues you for over one million dollars. You may be wondering what kind of insurance you should buy to protect against situations such as these. The answer is umbrella liability insurance.
It is for extreme situations such as these that umbrella insurance is purchased. Umbrella insurance, however, is not really something designed to be purchased alone. It is designed as more of a way to fill in gaps in existing forms of insurance coverage that an individual may have. You may need Umbrella insurance, for example, if your car insurance can only pay out a certain amount in certain situations. Another situation may present itself when your home insurance can only pay out at a certain rate.
Umbrella insurance acts as a kind of backup insurance to come into play when other forms of coverage a person owns have become exhausted. For example, a person may be sued for $1,200,000. That person may have car insurance that can only pay out $400,000 and home owners insurance that can pay out $250,000. If this person does not have umbrella insurance, that person may end up losing almost all of her possessions. However, with one million dollars worth of umbrella insurance, the amount of coverage may be more appropriate to cover the actual loss amount.
Umbrella insurance doesn’t only fill in the gap for these kinds of policies. It can also be used in many other situations in which a person may be sued for damages. The reason it is called umbrella insurance is because the kind of coverage it provides is very broad. This is why umbrella insurance is extremely popular with businesses that are at risk of being sued in a multitude of different scenarios.
“Our blogs are for general education and information only and may not represent your unique needs. Coverages will vary. Please contact your insurance agent to verify your specific policy terms and conditions.”