What Is an Umbrella Insurance Policy?

• December 28 2023
• |   Insurance

An umbrella insurance policy is an extra layer of protection that goes beyond your standard policies’ limits. This coverage is created and designed to safeguard you, a policyholder, from financial hardships that may come up due to unpredictable events. Unlike specific existing policies like auto or homeowners’ insurance, this policy offers broader coverage.

An umbrella insurance policy helps you when costs exceed the limits of your primary policies, like auto or home insurance. The policy is a safety net that offers extended security when your standard policies fall short.

By providing additional liability coverage, umbrella insurance protects you from the financial repercussions of unforeseen events when a claim has been made against you, the policyholder, on behalf of the wronged party.

At Leverty & Associates Law, we know that accidents occur, and anyone can get sued even when not negligent. We also know that some insurance policies cannot cover the extent of some damages. This is where umbrella policies step in, and we have experienced attorneys who can help you through this process.

Why hire our lawyers to help you with your insurance problems

At Leverty & Associates Law, we have more than 50 years of experience protecting our clients’ rights. Aside from helping you fight lawsuits if you were injured or if your property was damaged, we can also give you advice on when and how you can get and use your umbrella insurance policy.

We have lawyers who are experienced in insurance law, and they can help you with your insurance problems. Your legal needs are our priority, and we can give you the professional and legal support you need. Contact us at (775) 322-6636 (Reno) or (702)507-0201 (Las Vegas) for a free consultation.

How does an umbrella insurance policy work?

An umbrella insurance policy provides additional liability coverage. Umbrella insurance policies are triggered only when your existing or primary liability limits have been exhausted or the claim is excluded from the basic liability coverage. There are also situations where existing insurance policies cannot be used or fall short.

For instance, when you have a home insurance policy but don’t have car insurance, you cannot use the home insurance when you damage someone else’s car. When your existing policies fall short, your primary liability coverage cannot cover the damage you caused, or when your fundamental liability limits have been exceeded, the umbrella policy kicks in by helping you cover costs.

What an umbrella insurance policy covers

An umbrella insurance policy covers a lot. It covers many legal problems and provides monetary protection beyond the limits of existing insurance policies. Unlike primary policies, your immediate family can be included in this insurance policy.

However, it only provides monetary assistance when you are responsible for the damage or injury. For example, if a delivery person gets bitten by your dog because you didn’t keep it restrained, even knowing someone was coming to deliver something, an umbrella policy would cover all the costs if you get sued for negligence.

But if your house gets damaged in a windstorm or by other natural disasters, the policy would not cover any costs because you did not cause the natural disaster to happen. An umbrella insurance policy provides coverage for the following;

• Bodily injury
• Pet attacks
• Property damage
• Professional liability
• Medical malpractice
• Lawsuits like defamation, libel, wrongful eviction or entry, slander, invasion of privacy, false arrest, detention or imprisonment, malicious prosecution
• Incidents that happen outside your place of residence.

The umbrella insurance policy does not provide coverage for the following;

• Uninsured motorists
• Natural disasters
• Injuries or property damage caused intentionally.

How much does umbrella insurance cost?

When considering investing in an umbrella insurance policy, it is essential to evaluate your lifestyle, assets, and potential risks. Wealthy individuals, homeowners, or those with significant savings are encouraged to explore umbrella coverage because they are more likely to face lawsuits.

Umbrella insurance policies usually start at one million dollars in coverage; depending on your needs and financial status, limits can be higher. To qualify for umbrella insurance, you must carry a minimum amount of underlying liability coverage on your primary policies. When getting an umbrella insurance policy quote, your insurer will base the rate on factors such as:

• Where you reside
• Your credit score/history
• Your driving record
• The chances of your filing an umbrella insurance claim.

Why you need an umbrella insurance policy

There are some situations where having an umbrella insurance policy is much needed. If you are a wealthy individual or you have a wealthy family, you or your family can be easy lawsuit targets. You will need an umbrella insurance policy to protect your properties and significant assets from lawsuits. The umbrella policy is like buying extra protection and coverage for your assets.

If the damage to a property can be linked to you, or you caused an expensive auto accident that injures other people, some of your assets could be seized if you eventually lose the lawsuit.

However, you do not need to be wealthy to have this type of insurance; as a policyholder, you might engage in activities or work jobs that could increase your risk of a lawsuit. For example, you might have hostile dogs as pets or own a swimming pool.

If you get sued, your umbrella insurance starts to pay out the moment your primary insurance liability limits are exhausted, and it will continue until you reach the umbrella’s policy limit. Therefore, to be safe, you should buy enough umbrella insurance so that your total liability covers your net worth.

Get help from Leverty & Associates Law

At Leverty & Associates Law, we have attorneys who have dedicated their expertise, time, and knowledge to helping clients who require legal assistance. We have successfully helped many clients with their insurance problems, and we can help you, too. All you need to do is reach out to us. Contact us at (775) 322-6636 (Reno) or (702)507-0201 (Las Vegas) for a free consultation.