Imagine getting sued by someone because of an accident you caused, and the settlement exceeds the limits of what your standard homeowners policy covers. How would you pay for it? This is a question most people never have to worry about, but some homeowners are at greater risk of having this happen than others. Understanding what umbrella insurance is and what it covers can help you determine if umbrella insurance is right for you.
Umbrella Insurance Explained
Like the name suggests, umbrella insurance covers many things that standard plans for homeowners, auto, or watercraft insurance don't cover. While there are limits to umbrella coverage, it's still a helpful solution in the event you are sued for property damage, unintentional bodily harm, or other liability cases, including character defamation. This liability coverage extends to your family and other household members, including damage caused by pets or children.
What umbrella insurance doesn't cover encompasses various scenarios in which the policyholder is found to be responsible for intentionally damaging someone else's property or causing them physical or mental harm. It also doesn't protect the policyholder's property. Even with these limitations, umbrella insurance is worth considering as it helps cover gaps in standard insurance and is inexpensive compared with other types of insurance.
Scenarios Covered by Umbrella Insurance
Use the following information as a general umbrella policy guide to help you decide if you need coverage for similar potential scenarios. You'll need to talk with your insurance agent to determine what types of coverage the company offers in its umbrella policies. Every insurance agency is different, so you may need to shop around. Here are a few scenarios that are commonly covered by umbrella plans:
- Your large dog breaks loose and attacks a person down the street. They sue you to pay for medical bills and lost wages. If the pain and suffering are severe enough, they can demand even more money.
- One of your kids gets into a fight at school and physically hurts a classmate on the playground. The victim's parents then sue you to pay for medical costs, pain, and suffering.
- While driving across town, you cause a collision with another vehicle due to the slippery road conditions. The other driver's car is totaled, so they sue your insurance company to get the vehicle replaced.
- You like to throw backyard barbecue parties. At one of your parties, people start getting sick and have to go home. Several of them later learn they suffered from food poisoning after eating the dinner you served. Several friends sue you to pay for medical bills and lost wages.
- A neighbor's sliding glass door breaks when your son throws a baseball over the fence, which he didn't mean to do. The neighbor wants it repaired, which is fortunately covered by your umbrella insurance.
- At your home, while among several friends, you tell a joke about someone who is also present there. That person doesn't think it's funny and sues you for slander, saying it damaged his reputation. He may have a case if he can prove it led to a loss of income.
- Your teenager throws a secret party while you're away for the weekend. The cops have to bust it up because of complaints from neighbors about the loud music. The next morning one of the neighbors discovers property damage that he suspects was caused by someone at the party. He begins questioning kids and parents about the party in which your name keeps coming up because you're the owner. He sues you for the damage to his property.
While these are just a few examples, it can help you understand the types of things typically covered by umbrella insurance.
After reading the diverse and supplemental qualities of umbrella insurance, you can determine if it fits your household needs. Like many insurance policies, it provides safety and peace of mind.
Little & Sons Insurance Services understands that accidents happen and are here to help you find the coverage you need for your unique set of needs. Call us today to discuss umbrella insurance options!
