When life hands you lemons, insurance can solve some of the sour. Whether it’s covering automotive repairs from a car accident or wind damage caused by a hurricane, insurance is the best protection to have for the unexpected.
But what happens when the limits on your insurance policy aren’t enough? If the damages exceed the amount of coverage you have in place, you may have to cover the rest out of pocket.
That’s when umbrella insurance comes in handy.
What is umbrella insurance?
Much like an umbrella covers you from the harsh weather elements, this form of insurance shields your existing policy should your liability limits be exhausted. Think of it as insuring your insurance policy.
And as the following will show, umbrella coverage can really pay dividends when you reach the end of your insurance rope.
1. Exceedingly affordable
Aside from the variety of scenarios umbrella insurance can address, perhaps its best aspect is its low cost. As noted by the Insurance Information Institute, for a few hundred dollars per year, you can buy $1 million worth of protection. For amounts above $1 million – umbrella insurance is usually available in million-dollar increments – the added cost is usually less than $100.
2. Protects your biggest investments
While the American dream of homeownership is alive and well – roughly two-thirds of people in the U.S. own a residence, according to government data – it’s not exactly a drop in the bucket. The typical property today sells for approximately $258,000, according to the National Association of Realtors. So if something happens on your property and you’re found to be at fault, umbrella insurance can keep you financially protected if your homeowners insurance isn’t enough.
3. Covers dog bites
If you own a dog, consider yourself in good company, as an estimated 44% of all households have at least one, according to data compiled by the American Society for the Prevention of Cruelty to Animals. Dog ownership comes with a variety of responsibilities, including the unfortunate ones. In 2016, for example, dog bites led to $600 million in homeowners insurance losses, according to the Insurance Information Institute. What’s more, the average cost per claim has risen by more than 70% since 2003.
Fortunately, umbrella insurance can adequately shore up your coverage defenses.
4. Covers allegations of libel or slander
If someone sues you for alleged defamation of character – whether written or spoken – they have to be able to prove damages, such as loss of income. This can be a tall task, but in the age of social media, there are more ways to injure reputations. According to a recent survey of lawyers conducted by Robert Half, a majority said they’ve seen an increase in their case load of lawsuits involving social media.
While a standard homeowners policy won’t protect you from allegations of libel or slander, umbrella insurance will, including coverage for court costs and award settlements.
5. Protects you from car accident liability
According to the National Highway Traffic Safety Administration, more than 95% of all car accidents are caused by human error. This means that if you’re in a crash, there’s almost always someone at fault.
Car accidents and injuries are expensive, and according to the National Center for State Courts, 66% of all liability lawsuits in the U.S. involve automobiles, The Wall Street Journal reported.
Unlike comprehensive coverage, which is optional, every car insurance policy has liability protection. But if the damages are over and above what’s in place, umbrella insurance can make up the difference.
Elephant is your umbrella insurance expert. When the unexpected happens, make sure you’re adequately covered. Give Elephant a call today at 855-756-7869 to find out how Umbrella can help your insurance needs.
This article is intended for informational purposes only. It does not replace or modify the information contained in your insurance policy.