Definition: Umbrella liability insurance is designed to give one added liability protection above and beyond the limits on homeowners, auto, and watercraft personal insurance policies. With an umbrella policy, depending on the insurance company, one can add an additional 1-5 million in umbrella liability protection with umbrella coverage. This umbrella liability insurance protection is designed to “kick-in” when the liability on other current policies has been exhausted.
Umbrella liability insurance is actually very inexpensive. And since many people are realizing how much more money is being awarded in law suits now, knowing that they have extra insurance money from their umbrella liability to use if they are ever sued, they have found that the cost of umbrella coverage is small compared to the risk of not having the extra umbrella liability insurance.
Examples: Linda was sued for a golf club mishap she had while playing golf with her girlfriends. One of her girlfriends got hurt really bad and decided to sue Linda. Linda's homeowners liability policy covered her legal expenses for being sued, but it eventually ran out. She was thankful that she decided to purchase her umbrella liability insurance policy a few years ago because it kicked-in and covered the rest of her legal expenses
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