An umbrella policy is a type of liability insurance that goes outside the scope of other insurance policies, hence the term umbrella. It is usually used as supplementary insurance for an existing policy, but it can also be used as a primary insurance policy. The following are examples of different types of damages that this type of policy will usually cover:
Whether you’re a home or business owner, rent a house or own a car, umbrella policies are absolutely essential if you want to protect your assets and your future because these policies limit the type of lawsuits that can be filed against you. For example, most types of insurance may not cover personal liability issues such as slander, false arrest or libel, whereas you would be protected from all three with an umbrella policy.
If you’re a landlord and the dog of one of your tenants bites another person while on the property, you can be held liable because you own the house. Some homeowners policies may not cover this type of situation, but with an umbrella policy, you would be protected.
As you can see, there are many situations in which having an umbrella policy can be a great benefit. Umbrella policies protect your assets and safeguard your financial future by providing protection you cannot get with other policies.