What is Umbrella Insurance
There are many types of insurance coverage that we have to have for our everyday lives. Most of these coverages are self explanatory and we know exactly what they are and why we need them. Home insurance, auto insurance, pet insurance and medical insurance falls into this category. However, there is one insurance policy that people don’t seem to fully understand and, in turn, think they don’t need it. This coverage is called Umbrella Insurance so, let’s discuss why everyone needs an umbrella policy.
Who needs Umbrella Insurance
Umbrella Insurance is for anyone that has assets they need to protect like a home, RV, boat, ATV or other vehicles. Umbrella protection is also good for people with children, animals, if they use social media, volunteer or regularly like to entertain in their home. Everything mentioned here is a liability risk that most people don’t even think or know need they need coverage for and this is where an umbrella policy comes into effect.
You have insurance for a reason so why not make sure you have the best and most coverage you can get and getting an umbrella policy is one of the ways you can be sure you’re fully covered.
Any incident that results in a large claim will benefit from an umbrella to provide coverage above existing underlying policies. Make sure your company offers a true umbrella and not just extra liability.
A good example of what an umbrella policy will cover is in a scenario where you go overseas and rent a car and get into an accident. Your home or auto policy will not cover this incident but your umbrella policy will have you covered. Your umbrella policy will cover above your retained limit which is similar to what you consider your deductible.
An umbrella should offer additional protection and not just excessive coverage in specific circumstances. Umbrellas will also include broad personal injury coverage like protection against slander or liable, even if online. For example, a lawsuit that erupts due to activities online like a post on social media.
There are several unforeseen situations that can occur in our daily lives and many times our underlying coverage isn’t enough to pay the full claim. Sometimes, there is NO coverage at all on your underlying policy. If this is the case, you need extra protection and this is the importance of a good umbrella policy.
Umbrella benefits
An umbrella policy is more than just adding more coverage. Most people can get umbrella coverage for less than $2/day. If you combine your home and auto with your umbrella coverage it could end up saving you money. Look into open peril umbrella policies because they will have broad definitions to what defines personal injury. You can be covered at home or traveling (even internationally).
Umbrellas will cover attorneys cost, win or lose, for all claims covered under the umbrellas even if they’re not covered by the underlying required policy. It also covers all qualifying family members in your household.
Qualifying requirements for an umbrella policy:
There are a few standard qualifying requirements for an umbrella policy so if you’re interested in this additional coverage, keep in mind that you’ll need at least the following requirements to be offered most umbrellas.
Most companies will require you to have an underlying auto policy. Different umbrella limits have different qualifications. For example, if you’re looking at a 1 Million limit you’ll most likely need to have at least 250/500/100 or 300 combined single limit. If you’re looking at a 2 Million or higher limits you most likely need to have at least 500/500/100 or 500 combined single limit.
In most umbrellas if you’re married or have a domestic partner, all underlying exposures must be co-owned and insured in both names to be qualified as named insureds on the umbrella.
Umbrellas cover many types of vehicles including specialty vehicles like motorhomes, watercraft, exotic sports and performance vehicles and high performance vehicles. Don’t assume your vehicle disqualifies you for coverage, just make sure your company has the right coverages to include your valuable possessions by asking your agent if your vehicle qualifies.
Another important qualifying detail is that most umbrellas state that you must have a clean driving record for 3 – 5 years prior to issuance of the policy.
Disqualifying incidents:
There are a few incidents that will automatically disqualify you from many, if not all umbrella policies, please see the information below.
DUI
Driving with a suspended or revoked license in the past 5 years.
Having more than 2 at fault accidents in the last 3 years.
Situations that can make you ineligible for an Umbrella policy:
Having a specific high profile job.
High incidents of bad driving among any member of your household.
Home care services like daycare in the home or secondary or rental property.
Farming or ranching locations.
Keep in mind that driver or operator exclusions on the primary policy will automatically transfer to the umbrella policy. However, spouses or domestic partners, and dependent children under 18 cannot be excluded on the umbrella.
Remember a true umbrella policy is not just excessive coverage. It’s additional coverage that can have your back in many unforeseen circumstances including traveling, entertaining in your home, being active on social media, attorney costs that are associated with incidents in your umbrella coverage, and additional assets that need coverage like vehicles including boats, RV’s and custom vehicles.
As you can see, there are many benefits to having an umbrella policy and many different factors that you have to consider when purchasing your umbrella. If you still don’t have a good understanding of what an umbrella policy covers or if you’re eligible or not to purchase this additional coverage, don’t just assume you don’t need it. You may find yourself in a situation where you’re kicking yourself thinking you should’ve looked further into additional coverage when you find yourself in a difficult situation while online, entertaining or traveling. You never know what can happen when you’re entertaining in your home or traveling, even overseas.
Call (720) 213 – 8830 or contact Suburban Insurance here today to speak with a licensed professional that can help you truly understand all the guidelines and answer any questions you may have about an umbrella policy.