THURSDAY, FEBRUARY 24, 2022
Have you ever considered what the cost would be if someone were to sue you after they get hurt in your home? What if they demand compensation because you accidently damaged their property? Most people don’t like to think about the financial ruin that might be brought by such a challenge.
Under your homeowners insurance, you might have liability insurance available to help you cover the costs of a lawsuit. But, even this coverage is not unlimited and there are times when a claim might exceed your liability limits. It’s at this point that a benefit known as personal umbrella coverage can step in to provide lifesaving support. Here’s how it works.
The Basics of Personal Umbrella Liability Policies
If you are found to be legally responsible for injuring someone or damaging their property, then you will have to pay for their losses. Without a personal umbrella liability insurance policy, any losses beyond the limits of your standard liability insurance coverage will come out of your own pocket.
A personal umbrella liability policy provides an extra layer of insurance coverage over your standard liability policy limits. It protects your personal assets by kicking in when your standard liability coverage is exhausted. Usually, you will find that one umbrella plan can apply to multiple personal policies at once, including homeowners, auto, boat, motorcycle and renters policies. 
Who Needs an Umbrella Liability Policy?
High-risk activities or hobbies—having a teen driver at home, owning a swimming pool, entertaining frequently—can increase your odds of being sued if someone gets hurt as a result of the circumstances. It is a good idea to supplement your insurance with a personal umbrella policy under the circumstances.
How Much Coverage Do I Need?
You do not want to be financially ruined by an accident lawsuit brought by someone who suffered harm on your watch. Therefore, you’ll want to consider your full net worth in order to adequately protect it with matching liability coverage.
This is particularly true for high-value homeowners, who have more value wrapped up in their property than others. A lawsuit could be devastating to their security, and even the liability coverage within their homeowners plans might not be adequate. The added benefit of umbrella coverage—which can often provide extra coverage starting at a $1 million minimum—is that it will provide a high amount of additional protection that you might not even realize you need.
How Much Does Coverage Cost?
The good thing about umbrella coverage is that it generally is very affordable, particularly when you weigh the amount of additional benefits you will receive. Many policies only cost a few hundred dollars per year, which is comparable to, if not less than, the standard premium on your home or auto insurance. Get the additional protection you need with a personal umbrella plan today.
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