Umbrella Insurance Policies
Umbrella Insurance works like additional liability insurance. It is above and beyond the liability insurance you already have. This coverage protects you from major lawsuits and claims, which can keep you from losing all your money if faced with a lawsuit.
Umbrella policies kick-in when the limits of your automobile, boat or homeowner’s policies have been exhausted. The policies also provide coverage for claims excluded by other policies. This includes incidents such as slander, libel, and false arrest.
Umbrella insurance is useful in other situations as well. For example, it might help if you were at fault in an automobile accident that caused medical bills for several people. Even if you weren’t sure the accident was your fault, you would still be faced with the expense. Or perhaps your dog destroyed a neighbor’s property. Your dog did it, but you are responsible for the expense.
Here is how an umbrella policy claim works. Suppose you are at fault for an accident, and a lawsuit if filed against you for $800,000 in medical care. Maybe the person making the claim has hired an aggressive lawyer who usually wins cases. Now suppose you have a $200,000 automobile liability policy. The umbrella liability policy would cover the difference between $200,000 and $800,000.
When to Apply
To receive umbrella insurance, you must first have a standard liability policy. Decide how much coverage you want, and your insurance carrier will draft a policy that covers you up to that limit.
Types of Umbrella Policies
Umbrella policies are usually “follow form” policies, and that means they conform exactly to the type of coverage in the existing policy. “Follow form” policies will only cover losses above your existing policies.
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