How Personal Umbrella Insurance Fills Gaps in Your Current Coverage

Auto insurance and homeowners insurance typically offer liability coverage for third-party bodily injury, property damage and personal injury. But what happens when those policy limits are exceeded? Umbrella insurance can pay off under these circumstances.

What Is Personal Umbrella Insurance?

Personal umbrella insurance is a type of policy that extends the liability coverage limits of your primary policies, such as homeowners or auto insurance. When the liability limits of a primary policy are exhausted, umbrella insurance can provide additional coverage. This can be particularly beneficial for large claims or lawsuits that might otherwise place significant financial strain on the policyholder.

Benefits of Umbrella Insurance

The following are potential benefits of umbrella insurance:

• Gap coverage—Umbrella insurance is designed to cover gaps in coverage. For example, if you are found at fault for an auto collision accident that results in $100,000 worth of damage and your auto policy’s liability coverage limit is $50,000, your umbrella policy can cover the remaining $50,000. Without umbrella insurance, you would need to pay the $50,000 out of pocket, which could be financially devastating.

• Broader coverage—Umbrella insurance can also provide coverage for incidents that are not included in your primary policies, such as libel, slander and defamation of character. These policies may be particularly beneficial for business owners, landlords and public figures who face a higher risk of these types of claims.

• Liability defense claims—In addition to covering liability claims, umbrella insurance often includes legal defense costs. For example, if you are sued for defamation and your primary policies don’t cover the claim, your umbrella policy can help pay for attorney fees and court costs. This benefit ensures you’re protected from the financial burden of lengthy legal battles.

• Peace of mind—Despite offering extensive coverage, umbrella insurance is typically cost-effective. Premiums are relatively affordable for the financial protection it provides, making it an excellent investment for safeguarding your assets and achieving peace of mind.

Learn More

Contact Southern Insurance AL LLC to discuss your umbrella insurance options.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.