Should You Carry Personal Umbrella Insurance?

Umbrella insurance coverage protects against potential financial devastation when an unforeseen event causes property damage or injury, and the policyholder is held responsible. This policy is designed to step in when other forms of insurance, such as auto or homeowners, have hit their limits. It is essential to consider the total value of the assets that you may wish to protect, evaluate your unique set of risks, and determine the impact of a potential loss of future income.

Beyond the standard set of insurance policies to protect your assets and your loved ones, you may have overlooked the importance of umbrella insurance. The financial protection it offers comes into effect only under certain, but often crucial times.

What Exactly is Personal Umbrella Insurance?

Umbrella insurance supplements other liability policies most people already have in place, for instance, your standard auto, homeowners, or renters insurance.  It will come into play when the liability coverage on those policies has been exhausted.

This broad coverage aims to protect you and your assets from the financial fallout of common risk exposures such as owning a swimming pool or even from some unforeseen instances.

Let’s say you get in an auto accident and are held responsible for damages or injuries. Umbrella policies will cover the resulting liability that goes beyond the amount covered by your auto insurance policy.

In some cases, umbrella policies may also offer a broader coverage that can safeguard your assets from damages not covered by the underlying policies, such as libel or slander, and can assist with the costs of legal fees.

Why is Umbrella Insurance Important?

Consider the assets you own and the role they play in your financial wellbeing. What commonly comes to mind is a car, house, investment accounts, and checking and savings accounts.

If you think even beyond that, your projected stream of future income is considered an asset as well and could also be the most valuable asset of all. If you were to be hit with a  lawsuit for a substantial sum of money, while lacking the proper insurance to cover the damages that may arise, you would personally have to pay for the expenses out of pocket. Personal umbrella insurance would protect you from financial ruin that is incurred by an unintentional mishap. Umbrella insurance is a substantial risk management investment for both dollar limitations and scope of coverage.

The Coverage Explained

An umbrella policy is essentially a set of 3 broad categories:

Bodily injury liability will step in for the expenses of the injuries to another person (could include the cost of medical bills and liability claims).

Property damage liability covers damage or loss to another person’s physical property.

Other personal liability protects you from other actions you could be sued for, including but not limited to slander, libel, and false arrest.

Coverage gap is one common issue in the insurance world, which can arise due to different expiration dates between regular coverage and an umbrella policy coverage. You can limit the risk of this potential gap in coverage by having one insurance agency underwrite all of your standard and umbrella policies together, giving them the same expiration dates to prevent coverage gaps. Keep in mind that your umbrella coverage should cover the value of the taxable assets you own and homes beyond the primary residence.

About Barnes Insurance Agency

At Barnes Insurance Agency, we specialize in vacation home rental insurance to ensure the protection of your property and assets. We strive to offer customizable solutions to meet your specific needs. For more information, contact us today at (866) 733-5424.



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