Umbrella Insurance Policy: How it Works and What it Covers
Posted by Klinger Insurance Group on
What is an Umbrella Insurance Policy?
An umbrella insurance policy provides coverage above and beyond the typical property insurance. It covers property damage, injuries, personal liability situation, and certain lawsuits.
Let’s say you own a rental property, and you buy landlord insurance for that property that covers up to $300,000 in liability. Accidentally, your tenant in that property was injured on the premises and sues you for damages and the cost of the injuries is $500,000. Your landlord policy will cover $300,000 of the injuries, but who will cover the remaining $200,000? Your umbrella insurance policy will. It will cover the amount above and beyond the limits of your landlord policy.
What Does Umbrella Insurance Cover?
Bodily Injury Liability- it helps you cover the cost of the medical bill and liability claims to injuries. For example, a delivery man who slips and falls on your wet patio or dog caused harm to a passerby on your property.
Property Damage Liability- it helps you cover the cost of loss or damage to others’ property. For example, it covers accident-related damage to the other automobile.
Legal Costs- it helps you cover the court costs and other legal and lawyer fees.
What Doesn’t Umbrella Insurance Cover?
Your own injuries or damage/loss to your personal property
The damage you cause intentionally and criminal acts
Liabilities stemming from your occupation or business
The liability you agreed to assume under a contract you signed
Liability of armed conflict or war-related damage
Several factors that can affect umbrella insurance costs: