Umbrella insurance protects your assets in the event of a lawsuit against you. You could be sued for whatever reason, and that would put your assets such as your house, car, and retirement accounts at risk. This coverage provides extra liability that would kick in when other liability insurance has done its part.
When a lawsuit exceeds the limits on your primary liability policy, you are responsible for the remaining expense. Also, you might need coverage for something not in your existing policies. This can include someone suing you for libel, slander, false arrest, or a personal injury that occurs on your property. Umbrella insurance can be beneficial in all these scenarios.
Bodily injury covers medical bills and liability claims associated with damage to another person.
Property damage covers the cost of damage to someone else’s property. Rental property deals with incidents related to your rental property. And lawsuits cover legal fees if you’re sued for things such as libel, slander or face malicious prosecution or false imprisonment.
Who Needs Umbrella Coverage?
Umbrella insurance is not a type of insurance that most people think about. For most people, the liability allowance provided by traditional insurance is enough. But if you have assets for which you would like extra protection, then umbrella insurance should be considered.