When You Need Personal Umbrella Insurance

Personal umbrella insurance is a secondary type of liability insurance (not a stand alone policy), covering personal liability beyond the standard homeowners policy. It may cover multiple properties and cars depending on what you select.

Personal umbrella insurance offers added liability protection for lawsuits and claims to protect your financial future or established assets. It kicks in when your base policy liability limit is not enough.

Is it Necessary?

We live in a litigious society and homeowners, auto, and watercraft policies have a limit on liability insurance. Liability insurance is the portion of a policy typically covers expenses such as an injured person’s:

  • Medical bills
  • Rehabilitative therapy
  • Lost wages due to the negligence of the at fault person
  • Legal defense

Standard liability included in one’s homeowners or auto policy is often not enough for medical expenses and legal fees.

If an unfortunate accident occurs that is your fault, do you have enough liability insurance from your current policies to cover your costs for negligence? Since no one can predict how much a judge may award an injured person, umbrella insurance is a strongly recommended protection for everyone.

How much personal umbrella liability insurance coverage should be obtained is based on your personal situation. Ask yourself the following:

  • What is the value of your assets?
  • What is your potential loss from future income?
  • What specific risks do believe you could face?

Who Can Benefit from Umbrella Insurance?

Those with established assets they want to protect stand to lose significant amounts of money in a lawsuit. Also, anyone who has potential future earnings or assets may also be at risk. Everything of yours could be up for grabs in a lawsuit, including your savings and investments.

Even without established assets, don’t assume a court will not award benefits to the third party if you are held liable for damages.You could be obligated to pay off the damages with your future earnings. Don’t allow your future earnings to be jeopardized.

How it Works

Umbrella liability insurance can protect you from litigation arising from property damage and  injury associated with legal defense costs if you get sued for damages to other people’s property or injuries. A home insurance policy provides a foundation for the primary liability for a loss, once that coverage amount is maxed out, then the umbrella insurance kicks in.

You select the amount of coverage you would like to have with umbrella insurance. In order for the umbrella policy to start paying out coverages, a primary liability policy must first be in place and have maxed out on claim payments. Speak to an Arroyo Insurance agent to better understand how this could benefit you.

For instance, homeowners policies will offer primary liability but state minimum amounts of coverage are not always sufficient to meet the minimum underlying requirements  of the umbrella policy.

About Arroyo Insurance Services

Arroyo Insurance Services was officially established in 1986, but we have roots dating back to before 1950. One of California’s leading client-oriented and independently owned agencies, we have over 140 employees with a combined experience of over 450 years, spread across 11 locations. We are committed to providing the best insurance and risk management services at the most competitive premiums, and backing it with hands-on service tailored to our customers’ needs. For more information on how we can mitigate your risks, contact us today at (877) 220-4769.