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Umbrella Coverage – Personal
The more you have, the more protection you need The more your earning power and assets increase, the more you
have at risk, and therefore, the more you need to protect.
If you think you need at least a million dollars of additional
protection above your current homeowners or automobile liability limits, you
can purchase something called excess liability. Often referred to as an
umbrella policy, excess liability is the additional protection you need in case
a judgment against you exceeds the liability limits of your existing auto or
homeowners policy. Available in amounts ranging from one to five million
dollars, excess liability coverage increases your personal liability limits
by adding protection to your current auto, boat or homeowners policies. Why
liability coverage from your homeowners and auto policy may not be enough Homeowners insurance provides a minimum of $100,000 liability
coverage (the coverage that protects you when people are injured or property
is damaged due to circumstances in which you or your family
are responsible). Although it varies widely by state, the typical
minimum liability protection for auto insurance is around $25,000 per person
and $50,000 per accident. With both of these coverages you can
purchase higher limits (or amounts) of liability protection...but the most
that can be purchased is $500,000 for homeowners policies or $250,000 per
person, $500,000 per accident for auto insurance. Again, this may not be
enough protection in today's lawsuit frenzied environment where million
dollar judgments are fast becoming the rule rather than the exception, even
for seemingly minor situations. To understand more about what excess liability coverage is,
and how it can help you, please review the following topics:
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What is Excess
Liability?
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Coverage provided
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How it works
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Some definitions
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Exclusions
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How much is enough?
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Money-saving discounts Available in amounts ranging from one to five million dollars,
excess liability coverage increases your personal liability limits by adding
protection to your current auto, boat or homeowners policies. Also, if
something is not covered in your homeowners policy (like libel), and it's not
specifically excluded in the excess liability policy, you're covered. Excess liability coverage provides: · Protection for covered claims by others for personal injury or
property damage caused by you, members of your family/household, or hazards
on your property for which you are legally liable · Personal liability coverage for occurrences on or off your
premises ·
An additional layer of protection above your primary auto
policy against auto-related liabilities · Protection against non-business related personal injury
liabilities such as slander, libel, wrongful eviction or false arrest · Legal defense costs for a covered loss. Lawyer fees and
associated court costs are covered · Worldwide coverage- no matter where you go, with the only
exception being situations involving foreign ownership of dwellings or cars Depending on the type of accident, your homeowners, auto or
boat policy liability limits are used up first, then the excess liability
policy covers all remaining costs (up to the amounts of coverage you
purchased). For example, if your neighbor dove into your swimming pool and
broke his neck, your homeowners liability coverage
would pay for the first $100,000 in damages. Your excess liability policy
would cover the rest (including associated legal fees) up to the one million
dollar policy amount that you had purchased. Most companies require that you carry certain limits on your
primary insurance policies (homeowners, auto and boat) in order to receive
excess liability coverage. For example, a company may require the following
primary liability limits: $100,000 for homeowners, $250,000 per
person/$500,000 per accident for auto and $300,000 for boat/yacht coverage. Insurance products tend to get loaded down with legal-sounding
jargon, especially a product that specifically deals with circumstances for
which you are legally responsible. Therefore, a few common definitions might
help clear up any confusion:
Personal Liability: Coverage for damages that
you are legally liable (responsible) for. This includes incidents occurring
at your home and/or caused by you, residents of your household or your pets.
Here are some common examples: your dog bites someone, a guest falls down
your front steps, your teenage son rough-houses with his buddy and
accidentally breaks that friend's leg! Often, insurance policies are defined not by what they cover,
but by what they don't. This is especially true for excess liability
products. If something is not specifically excluded, you're covered.
Exclusions vary widely by company. Here are some common exclusions: · damages
expected or intended by insured. · damages
arising out of business or professional pursuits. · liability
assumed under contract or agreement. · liability
arising out of ownership, maintenance, use, loading or unloading of aircraft.
· liability
arising out of ownership, maintenance or use of non-traditional watercraft
such as jet skis, air boats or air cushions. ·
liability
arising out of ownership, maintenance or use of most recreational vehicles.
Only snowmobiles and golf carts are covered. · damages to
property you take care of, own or use. · damages
covered under a Workman's Compensation policy. · liability
arising out of war or insurrection. Obviously, determining how much coverage is right for you is a
personal decision. Much depends on the value of the current assets you have
to protect. However, there are also other factors to take into consideration.
What will the value of your future assets be? Are you involved in activities
that put you at greater risk? Do you have teenagers? Do they drive? Your Insurance
Corner agent can help you determine the coverage amount that works best for
you. Money-saving discounts are available in most states if your
car, home or boat is already insured with the same insurance company.
Additionally, some companies are beginning to offer an endorsement (add-on
coverage) to existing homeowner policies that increases your liability limits
to the millions! Your Insurance Corner agent can help you determine whether
this endorsement is available, as well as help you determine the best
money-saving coverages available.
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