The Consequences of Not Having Personal Umbrella Insurance

Posted on 10 May, 2023

Personal Umbrella Insurance is a policy that can cover all the angles other policies might have missed. Both standard auto insurance and homeowners coverage typically address the costs of legal expenses or damages for covered incidents. Still, they may not contain enough coverage or apply to every situation. You need to go under the umbrella to ensure the protection you need.

What Is a Personal Umbrella Insurance Policy?

Personal umbrella insurance can do significantly more than standard homeowners’ insurance. Ultimately, you must understand the purpose of what this coverage provides.

The Purpose of Personal Umbrella Insurance

Umbrella insurance fills a much-needed financial gap when the limits of your primary insurance policies expire. It could also provide the coverage necessary to address excluded situations from your primary policies. The legal costs or damages associated with claims could rise much higher than the minimum coverage policy you choose, leaving you to pay thousands of dollars to resolve your liability. These expenses could lead you to financial ruin.

The Covered Incidents Under Umbrella Insurance Policy

It’s important to know what your coverage includes if you want to prevent unexpected financial loss. Your specific policy determines the liabilities covered, but most policies will address bodily injury or property damage where you bear liability. Property damage due to a flood or lightning strike isn’t something you cause, excluding it from coverage. Some claims typically filed on personal umbrella insurance include:

Dog bites
Bodily injury
Property damage
Lawsuits
Rental property
Car rentals

Your policy will outline exclusions in coverage, often including floods, natural disasters, uninsured motorists, or damages and injuries caused by intentional acts. Remember that your primary policy goes into effect first, and the umbrella policy pays out some or all of the remaining costs.

The Risk of Going Without Umbrella Insurance

Consider the alternative if you’re debating whether to consider personal umbrella insurance. You could face financial ruin if someone holds you responsible for medical bills or property repair after one unexpected incident.

The average award for a personal injury case is $31,000, a substantial sum for anyone to afford without notice. However, your assets and wealth accumulation could cause the injured party to seek more damages and compensation. You could lose everything if a lawsuit against you is successful.

The Things You Could Lose Without Personal Umbrella Insurance

When debating how much umbrella insurance to purchase, consider the risks you face and the assets you could lose. These are your potential liabilities and potential financial targets.

Risks You Face

Some possible risks you face include your commute to work, ownership of an aggressive dog breed, participation in dangerous activities, or a constant flow of guests or traffic on your property. Consequently, the more liability you face, the greater the need for a higher coverage amount on your policy.

Value of Your Assets

Your assets could include the basic targets of a car, house, retirement account, or checking account. However, future income, valuable art or jewelry collections, stock holdings, and rental properties are potentially under threat by a liability lawsuit.

The Support of Personal Umbrella Insurance

Umbrella insurance protects you from financial ruin. It’s important to consider what you stand to lose when deciding the amount and type of coverage you need.

About Byrnes Agency

At Byrnes Agency, we offer insurance solutions that can be tailored to meet your specific needs. Whether you’re looking for personal policies or commercial coverage, we have the right coverage for you. To learn more about our products, contact us today at one of our two locations.

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Dayville Office

Phone: (860) 774-8549

394 Lake Rd

Dayville, CT 06241

United States

info@byrnesagency.com

Hours of Operation: Monday- Friday 9:00am-5:00pm

Norwich Office

Phone: (860) 886-5498

6 Consumers Avenue

Norwich, CT 06360