The Importance of Umbrella Insurance
Carrying enough liability insurance is crucial when safeguarding your financial assets. This coverage protects you if your negligent acts result in injuries or property damage to a third party. A typical example is when you cause an auto accident and the liability component of your car insurance policy compensates the other party for their vehicle damage and medical bills.
While your home and auto policy may provide adequate liability coverage in most scenarios, what happens if the damages exceed your policy's limits? In these situations, umbrella insurance can come to your financial rescue.
What Is an Umbrella Insurance Policy?
Umbrella insurance is a stand-alone liability policy that provides an additional limit of liability coverage over and above your underlying liability limits that are already on your homeowners and auto insurance policies.
Life can be unpredictable, and as much as we plan for the best, sometimes the worst can happen. Umbrella insurance provides additional coverage that goes above and beyond to protect your assets.
Who Can Benefit From Umbrella Insurance?
Almost anyone who owns a home, vehicle or other valuable assets can benefit from the extra liability protection. Others who may have more significant coverage needs include:
- Homeowners who have potentially dangerous items, such as trampolines or swimming pools
- High-net-worth or high-income individuals with substantial assets
- Self-employed professionals, such as doctors, dentists, architects, accountants and consultants
- People who are in the public eye or interact frequently with other members of the community
- Landlords who own multiple properties to protect against injuries or property damage incurred by their tenants
- People who engage in high-risk activities like hunting, surfing, skiing or other sports
Umbrella Insurance Example Scenario
Umbrella insurance applies to many real-life situations that people like you experience every day.
For instance, suppose you’re liable for a car accident with multiple vehicles and the cost to cover the damages and injuries is $850,000. However, the liability limits on your auto policy are only $300,000.
In this case, your insurance would pay only $300,000 for the entire accident and you would be responsible for the remaining $550,000 out of your own pocket!
With an umbrella policy, you could extend your liability limits beyond the maximum provided by your underlying policies. In this case, an umbrella policy would provide liability limits above the $300,000 limit of your auto policy, up to the limit you choose for your umbrella policy (typically anywhere from $1 million up to $5 million in coverage, although higher amounts may also be available from some providers!).
In other words, you wouldn’t be left paying the remaining $550,000.
More examples…
- Your dog bites a neighbor's child
- A fire at your condo spreads to other units
- An accident at your rental property causes significant injuries
How Much Does Umbrella Insurance Cost?
While umbrella insurance provides substantial liability coverage, the cost of a policy is surprisingly low because it doesn't go into effect until the limits of the underlying policy are exhausted.
You could pay as little as $150 per year for $1 million of coverage — a small price to pay for comprehensive protection and peace of mind, given the litigious nature of our society.
Keep in mind that most insurance carriers require that you have at least your auto insurance policy with them to qualify for their umbrella policy. Stand-alone umbrella policies are also available for special situations.
Contact Us for a Custom Umbrella Policy Quote in York
If you live in or near York, Pennsylvania, AAdvantage Insurance Group, Inc. can provide comprehensive, affordable umbrella insurance to protect your assets if you are liable for injuries or property damage. As an independent insurance agency, we partner with multiple carriers to find the most cost-effective solutions for our customers.
We make it easy to get a quote for umbrella insurance. You can call our office to speak to an agent. You can also start a quote online, and we will reach out to discuss your unique liability coverage requirements.