Insurance is intended to protect individuals or businesses for a variety of reasons, such as house fires, car accidents, premises liability, lawsuits against companies, and many more. But what happens when your insurance denies a claim or is insufficient to cover all of the costs associated with the claim?
What is Umbrella Coverage
Many people ask the question, “what is umbrella coverage?”. Umbrella insurance is the added protection you may need if faced with an unfavorable situation or dramatic tragedy.
If you have valuable assets to protect, investing in an umbrella liability policy would be wise. Umbrella coverage comes into play if you reach your insurance coverage limit on either your home or auto policy. It protects you beyond what your insurance policy can provide in the case of unforeseeable events that could strip you of everything you have.
Although larger policy limits are available, many umbrella policies provide coverage of up to $1 million. Additionally, umbrella coverage protects you from numerous situations where general liability coverage falls through the cracks, including libel and slander.
What Does Umbrella Coverage Protect You Against
Umbrella coverage policies will protect you from a variety of circumstances, many beyond what your typical auto or homeowner’s insurance would cover. Claims for injury, property damage, personal liability, and other specific lawsuits fall under this protection.
One main benefit of umbrella coverage is the protection it provides in the event of lawsuits that are not typical. As stated previously, umbrella insurance policies can protect you if you are sued for slander and libel.
Broken down, here are some examples of the types of coverages that an umbrella policy would provide.
Bodily Injury Liability – This could cover the cost of medical bills or claims as to the result of damages to another person’s body.
- Injuries to others due to an at-fault car accident.
- Animal attacks such as dog bite injury.
- Injuries to a guest in your home.
- Injuries sustained to others while on your property.
Property Damage Liability – This could cover the costs associated with damage or loss to an individual’s property.
- Damage to vehicles and other property due to an at-fault car accident.
- Damage to another individual’s property caused by your pet.
- Damage to school property cause accidentally by your child.
Landlord Rental Unit Protection- This could cover costs associated with issues you may face as a landlord.
- Injuries occurring on the inside or outside of your rental property.
- Injuries occurring from your tenant’s pet biting someone.
How Does Umbrella Coverage Work
The easiest way to explain how umbrella coverage works is through examining potential scenarios. For example, let’s say you are in a car accident and it is determined that you are at fault. The other driver sustained severe injuries and is hospitalized for an extended period of time.
Although your automobile insurance could have a high limit of let’s say $300,000, the driver’s medical expenses will cost beyond what your insurance provides. If you cannot afford to pay the additional expenses out of pocket, you may be subject to a lawsuit, putting your assets at stake. This is where having an umbrella insurance policy would come into play through protecting your bank accounts, home, and personal property through paying the remaining monetary amount that your auto insurance did not cover.
What is the Ultimate Insurance Coverage
The most beneficial level of protection that an umbrella policy can provide is through obtaining one that covers uninsured motorist claims. These policies will typically cost around an additional $200-$300 annually, but the benefits far outweigh the costs. If you or a member of your family are catastrophically injured in an accident caused by an uninsured motorist, the umbrella coverage can cover all of the expenses incurred.
It isn’t uncommon for major medical bills to exceed $1 million, so you want to ensure that you and your family is covered in the event that your current insurance policy wouldn’t pay for all costs associated with the accident. If any of these scenarios could potentially apply to you, consider shopping for umbrella coverage.
A Phoenix Car Accident Lawyer Can Help
If you suffer an injury and are not sure if the “at fault” driver has enough insurance to cover your expenses, injuries, and damages, an experienced Phoenix car accident lawyer can help. Your attorney can explore your legal options and uncover all liable parties, so you can collect the compensation you need to pay for medical bills, lost wages, pain and suffering, and more.
In the event you are unfortunately injured, give us a call today with any questions you may have. Our Phoenix personal injury attorneys are here to help!
Jason Hutzler
Jason Hutzler is the founding partner of Phoenix personal injury law firm Hutzler Law, and represents individuals throughout Arizona. His practice is primarily dedicated to personal injury and car accident claims, leveraging his deep expertise as a former insurance adjustor to navigate the complexities of insurance negotiations.