Who Should Consider an Umbrella Policy?

Determining whether you should obtain an umbrella policy is an important aspect of managing your personal risk and helping protect your assets. This type of policy can be particularly beneficial in several scenarios or lifestyles.

For instance, if you own a rental property, you may be exposed to additional risks, such as a tenant or visitor getting injured on the property. Additionally, if you have substantial assets, an umbrella policy can help provide additional coverage to help protect these assets from financial liability in the event of a lawsuit.

Moreover, individuals with higher risk factors may want to consider obtaining an umbrella policy. This can include having a teenage driver in the family, owning a swimming pool, or participating in activities that could increase the likelihood of incurring substantial liabilities, such as hosting large gatherings. In these cases, the added coverage afforded by an umbrella policy can be invaluable, helping to safeguard you against liabilities that could otherwise jeopardize your financial stability.

Umbrella Policy Coverage Examples

To illustrate the practical application of an umbrella insurance policies, consider these example scenarios:

Serious Auto Accidents: Imagine an individual is involved in a severe car accident where they are at fault, and the damages and medical expenses of the other party exceed their auto insurance liability limits. An umbrella policy would help cover the additional costs so that they policyholder may avoid substantial out of pocket payments.
Incidents on Rental Properties: If an individual owns a rental property and a tenant or guest sustains a significant injury on the premises, the property owner could face a lawsuit with claims higher than their primary home insurance coverage. An umbrella policy could help cover these excess liabilities, helping to protect their assets and savings.

*Note: the above examples are provided as illustrative purposes only. The terms and conditions of a given policy may vary, and coverage will be determined by the policy’s terms and conditions.