Umbrella insurance is a personal excess liability insurance policy that protects you above and beyond the limits on your homeowners or condo insurance, car insurance, watercraft or other personal insurance policies. Umbrella insurance is designed to give you added liability protection for lawsuits, and claims that rise against you. It is an inexpensive way to protect your financial future or established assets.
Umbrella insurance is a secondary form of insurance, that requires a primary policy, or an underlying liability policy to first pay out on a claim before umbrella liability coverage becomes effective. For example, a home insurance policy provides the primary liability for a loss, once the amount of money in the homeowner personal liability is exhausted or maxed out, then the umbrella insurance kicks in. Umbrella insurance may also be referred to as excess liability insurance.
Umbrella liability insurance can protect you from:
People with established assets that they want to protect stand to lose significant amounts of money in a lawsuit. If you get sued you could lose any assets you have built up, including investments and all of your savings. The wealthy are risk, but so are those who have no assets. "In a litigious society everything is up for grabs, that includes your savings, your investments, and in absence of assets, potentially your future."
Today, lawsuits are everywhere. Lawyers are awarding larger amounts of money than ever. Homeowners auto, and watercraft policies have a limit on liability insurance. Liability insurance is the portion of a homeowners or auto Policy that pays for expenses such as an injured person's:
The liability portion of an insurance policy covers a legal defense representative if the negligence would happen to land the at fault person in the court room. After adding up all of the medical expenses for the injured and the legal fees of the negligent person, the standard liability in one’s homeowners or auto policy is often not enough.