While you likely already have auto and homeowners insurance policies, there are certain circumstances where these types of coverage won’t provide enough compensation to pay for damages. For example, a lawsuit against you could exhaust the funds that traditional policies provide, which is where umbrella coverage takes over. If this type of insurance interests you, below are answers to some of the most common questions that people have about it.

What You Should Know About Umbrella Insurance

What is it?

Umbrella insurance is also known as excess liability insurance, and it provides additional coverage to existing homeowners, auto, or renters policies. This gives extra financial protection to safeguard all of the policy holder’s assets, even if they owe considerable damages that are outside of what their original policy may cover.

How does it work?

Umbrella coverage only takes over if the original policy reaches it’s limit. For example, if a homeowners policy covers personal injury claims up to $300,000, and someone hurts themselves on your property and sues you for $500,000, you may have out-of-pockets costs of $200,000. Umbrella policies offer this extra protection to prevent you from laying out large sums of money and potentially going into debt.

What incidents will it cover?

Umbrella policies can cover the medical costs and liability claims that come from bodily injuries due to car accidents, accidents in the home, and pets. They also encompass property damage liability, covering damage to vehicles and other belongings. Finally, additional personal liability can protect individuals against damages from slander, libel, false arrests, and similar lawsuits.

When should I consider umbrella coverage?

Because accidents can happen at any time, all drivers and homeowners should have some umbrella coverage. Plus, compared to other types of coverage, umbrella policies are generally affordable.

However, some people have a higher risk of lawsuits, and are especially strong candidates for umbrella coverage. These situations include people who own or lease property, employ workers around their house, or have potentially dangerous features, such as pools or trampolines. All of these instances carry a potential injury risk, and can result in a lawsuit.

If you’re considering an umbrella policy or another type of insurance, turn to Hummel & Plum Insurance Agency. Serving Chillicothe, OH, this trusted agency has been providing the Ross County community with personalized coverage for over a century. Visit them online for more information about their services. Request a quote by calling (740) 773-1620.