Understanding How Umbrella Insurance Works

Umbrella insurance is a separate policy that can be added on to your homeowners or auto insurance, and it gives you more liability coverage. It can also cover some liability claims that other policies may not, such as false imprisonment, slander, and libel. Getting umbrella insurance can be less expensive than increasing the liability limits on other insurance policies. An agent at Silverton Insurance Specialist, LLC can help you determine how much coverage is necessary,

If your homeowner’s policy has a personal liability limit of $500,000 and you throw a birthday party where someone falls outside on the front steps, you would have to pay for the medical bills. If the guest that falls has some serious medical bills and ends up suing you with a judgment of $1 million, then you would be on the hook for an additional $500,000. Your homeowner’s insurance would pay the limit and then what would happen? Likely without umbrella insurance, you would have to pay for the rest of the money by dipping into your other assets, which can include your home, car, and anything else you own, as well as future wages.

If you have an umbrella policy that can kick in, then you wouldn’t have to pay these out-of-pocket expenses. It’s likely the umbrella policy will pay for any attorney fees that wouldn’t typically be covered under the homeowner’s policy. The only thing you would have to pay in this situation is the deductible on your homeowner’s policy. Depending on the situation, there isn’t a deductible to be paid on your umbrella insurance.

In this above example, there wouldn’t be a deductible on umbrella insurance. However, if there is a case where you are found liable and your auto or home insurance didn’t apply, then there would be an umbrella insurance deductible before the policy kicked in. Contact Silverton Insurance Specialist, LLC to get a quote on umbrella insurance.