Get Umbrella Insurance Coverage Options & Quotes
Welcome to the world of Umbrella Insurance, where we prioritize your peace of mind by safeguarding your home, car, and investment properties with insurance solutions. Our mission is to provide you with the protection you deserve, especially when unforeseen risks threaten your financial well-being. In this extensive guide, we will delve deep into the nuances of umbrella insurance, elucidating how it functions, what it covers, what it doesn't cover, the various coverage options available, and how to optimize costs effectively. Our team at Portsmouth Atlantic Insurance is dedicated to helping you navigate the complex landscape of insurance, anticipate potential legal risks, and select the ideal umbrella coverage tailored to your unique needs.
Average Umbrella Insurance Cost for a Person With One Home, Two Cars and Two Drivers
|Umbrella insurance limit
|Annual cost of umbrella insurance
|Source: ACE Private Risk Services
Umbrella Insurance FAQ: Your Questions Answered
What’s the difference between business umbrella and personal umbrella insurance?
Simply put, personal umbrella insurance pairs with family policies like home, auto, or boat insurance. Business or commercial umbrella insurance pairs with your business's general liability or commercial auto insurance.
How do I know if I need umbrella insurance?
The necessity for umbrella insurance is often not apparent until unforeseen circumstances arise. It is practically impossible to predict the future, but if you find yourself exposed to a multitude of liability risks, it becomes imperative to consider this essential coverage. For instance, if your home harbors potential hazards (swimming pool, trampoline, in-home business with client traffic, etc.), umbrella insurance should undoubtedly be a part of your financial strategy. The extra layer of liability protection not only provides peace of mind but also mitigates potential financial damage in the face of unexpected events.
How much umbrella insurance do I need?
Determining the appropriate amount of umbrella insurance coverage hinges on the evaluation of your assets, encompassing your property, savings, and investments. In a scenario where the combined value of your assets totals $2 million and your existing insurance policies extend liability coverage up to $1 million, a $1 million gap emerges. This gap underscores the necessity for umbrella coverage to bridge the financial chasm. Since predicting the future remains elusive, the best course of action is to consult with one of our licensed insurance advisors at Portsmouth Atlantic Insurance. They possess the expertise to assess your unique situation, identify associated risks comprehensively, and customize the ideal coverage options for your protection. Popular choices often include $1 million in additional liability coverage, but individual requirements may vary widely.
Does umbrella insurance cover natural disasters?
It is important to clarify that umbrella insurance is primarily geared towards liability protection, and does not encompass natural disaster coverage, which pertains to property damage. However, if you find yourself in need of natural disaster property coverage, our experienced team at Portsmouth Atlantic Insurance is equipped to assist you moving forward.
How does umbrella insurance work?
Umbrella insurance functions as an additional layer of protection that complements your existing policies. In the unfortunate event of an incident, such as a car accident, your auto insurance liability coverage assumes responsibility up to the limits of your policy. Umbrella insurance steps in to provide an extra buffer of coverage, should you face a lawsuit for causing injuries or property damage. In the aftermath of an incident, the process is straightforward—you simply file a claim. The insurance company will engage legal representation on your behalf and cover the associated litigation costs, including settlements, up to the predefined limits of the policy.
Does umbrella insurance cover landlords and their rental properties?
Absolutely, umbrella insurance can be seamlessly integrated with rental property insurance to extend comprehensive protection to landlords. This is particularly advantageous for landlords overseeing larger rental units with multiple families and tenants. Your umbrella coverage seamlessly complements your landlord insurance, bolstering your liability protection.
Will umbrella insurance cover my most important assets by itself?
Umbrella coverage is specifically designed to augment liability coverage limits, offering financial protection in situations where you may be sued for injuries, property damage, or personal actions that inflict mental anguish or harm to another person’s reputation. However, it's essential to understand that property damage resulting from events such as fire, vandalism, floods, or other causes requires separate coverages.
Is umbrella insurance worth it?
The value of umbrella insurance far exceeds its cost. It provides invaluable peace of mind in the face of unexpected events and the potential for lawsuits leading to financial damages. With umbrella insurance, your financial stability is fortified, offering a safety net in uncertain times. We always recommend umbrella policies to friends, family and clients. Anyone with assets to protect should definitely consider an umbrella policy.
What Umbrella Insurance Won’t Cover
Umbrella insurance doesn’t cover your own injuries or damage to your own property. Here are other problems typically not covered by umbrella insurance:
- Business losses
- Criminal acts by you
- Written or oral contracts
- Intentional acts or injury by you
- Damage due to nuclear radiation, war or terrorism
- Communicable disease, such as a lawsuit against you for giving someone an STD
Understanding Umbrella Insurance: A Comprehensive Overview
What Is Umbrella Insurance?
Umbrella insurance, also known as excess liability coverage, is a standalone insurance policy that acts as a protective "umbrella," extending extra coverage to your existing policies for business, auto, home, motorcycle, mobile or manufactured home, and boat insurance. It is a liability-only policy, designed to step in and cover expenses in the event of lawsuits related to injuries, property damage, or personal actions leading to emotional distress or harm to another individual's reputation. Umbrella insurance effectively extends the liability limits of your underlying policies when faced with substantial claims.
Most insurance providers offer umbrella policies in million-dollar increments, with coverage options starting at $1 million and extending up to $5 million or more. Some insurers may offer lower or higher limits, such as $500,000 or above $5 million. When you consult with one of our licensed insurance advisors at Portsmouth Atlantic Insurance, they will guide you towards the most suitable coverage based on your unique needs, handling all the intricate details on your behalf.
Who Has High Risk Potential for Lawsuits?
Your lifestyle or activities may put you at a higher risk of facing a lawsuit. Examples of circumstances that could increase your chances of being sued include:
- You serve on a charitable board.
- You have kids living at home.
- You have a swimming pool, pond or trampoline.
- You have dogs, horses or other large animals.
- You manage a family trust.
- You host large parties in your home.
- You employ household staff.
- You own rental properties.
- You have a high public profile.
How Does Umbrella Insurance Work?
Umbrella insurance plays a pivotal role by expanding the liability coverage of your existing policies. It steps in to cover expenses related to lawsuits, settlements, and legal defense, provided that the reason for the lawsuit falls within the ambit of your policy. For instance, imagine hosting a gathering at your residence, and a guest sustains injuries due to an uneven pavement leading to your entryway. If they decide to file a lawsuit seeking compensation for medical bills, lost wages, and other damages, your homeowners insurance would typically cover you up to its specified limit. In this scenario, if the awarded damages surpass your homeowners insurance limit, your umbrella coverage comes into play, bridging the financial gap by covering the additional costs associated with your legal defense and settlement.
Moreover, umbrella insurance may extend its protective umbrella to cover certain types of lawsuits that may not be covered by your homeowners, business, or auto insurance policies. This includes claims related to libel, slander, or invasion of privacy.
Purchasing Umbrella Insurance
Umbrella insurance is commonly available from insurers that sell auto, home and boat insurance. You’ll generally need to buy umbrella insurance from the company that provides your auto and/or homeowners insurance. Umbrella insurance is also available to people who buy renters insurance.
Insurance companies that offer umbrella insurance include:
- The Andover Companies
- Chubb Insurance
- Cincinnati Insurance
- Concord Group Insurance
- The Hanover Insurance Group
- Main Street America Insurance
- National General
- Patriot Insurance Company
- Plymouth Rock Assurance
- Safeco Insurance
- Safety Insurance
- Vermont Mutual
If you buy your home and auto insurance from the same company, you may get a bundling discount —even if you don’t buy umbrella insurance.
What Should I Consider When Choosing a Personal Umbrella Policy?
When you are choosing a personal umbrella insurance policy, make sure you buy an adequate coverage amount. Here are some tips:
- Estimate the total value of your assets. Your umbrella coverage amount should align with your net worth.
- Review your insurance policies. Look at the liability insurance amounts on your existing policies, such as your car insurance and home insurance. If the liability insurance is insufficient for covering your net worth, look into umbrella insurance.
Since your financial situation can change over the years, it’s a good idea to review your insurance policies regularly. For example, if your net worth grows, you want to increase the liability limits on your insurance policies (including your umbrella policy).
Is Umbrella Insurance a Good Investment?
An umbrella insurance policy can be an excellent addition to your insurance portfolio if you need liability coverage that goes beyond what your base car insurance or home insurance policies provide. Umbrella insurance is a good way to cover your net worth if you were to get hit with a lawsuit. You can buy a $1 million umbrella insurance policy for about $32 per month.
Without umbrella insurance, you risk losing assets like your home and bank accounts if you’re found responsible for other people’s injuries or damage to their property. For instance, if you cause a severe car accident and your car liability insurance is insufficient to cover a judgment against you, you could then make a claim on an umbrella policy.
If you don’t have many assets and can’t afford the higher auto and home insurance limits required to obtain umbrella insurance, then an umbrella policy probably isn’t a good fit.