An umbrella insurance policy can protect you from large and financially ruinous liability judgments or claims. A personal umbrella policy doesn’t provide you with first-dollar coverage; it only kicks in if you’re liable for a liability claim that exceeds the liability limits for your underlying insurance policies, such as auto, homeowners, or renters insurance, according to the Insurance Information Institute (III). Umbrella policies also cover some incidences that are not covered by auto or home insurance, such as libel, slander, or defamation. Here are some common liability claims that require umbrella coverage.
Costs Related to Lawsuits/ Legal Expenses
If you find yourself in the middle of a lawsuit, one of the key challenges you’ll face is the mounting defense costs. Legal fees can accumulate quickly; a single trial may cost over a hundred thousand dollars in legal costs. Your umbrella insurance can kick in and cover your defense costs. If you’re at fault, the portion of your umbrella coverage that didn’t go to legal fees will pay for your liability expenses.
Accidents Involving Teen Drivers
Teen drivers aged between 16 and 19 are three times more likely to cause a car crash than other groups of motorists. Teenage drivers are involved in about 8% to 10% of annual fatal crashes. Liability costs relating to auto accidents can skyrocket, especially if it involves multiple cars, devastating injuries, or individuals with overly huge income who might sue you for lost wages. If you have a teen driver, carrying umbrella coverage increases your liability protection against these greater risks.
Intoxicated Party Attendee
Picture this scenario. You throw a party in your home, then one of the attendees drinks too much and drives home while still intoxicated. Unfortunately, the driver crashes into something or someone. Depending on the laws of your state, you may be held partially liable for damage caused by the accident. Such indirect liability claims can exceed the limits of your home insurance policy, meaning you would need an extra layer of protection.
While dog parks are great ways to socialize our pets, there is always the possibility that your dog might end up in a fight with another. If your dog bites the other dog first or any other person who tries to intervene, you could face a costly bodily injury claim for both the dog and the injured person. You may be liable for medical expenses, lost income, as well as pain and suffering.
Accidents Involving Swimming Pools or Trampoline
If you have a pool or a trampoline installed in your yard and a visitor is injured while using either facility, you may face a liability claim. Because the cost may exceed the limits of your primary liability policies, umbrella insurance could help.
Pain and Suffering
If you’re held liable for an accident, the other party may sue you for pain and suffering. This is an extra cost relating to the loss of opportunity, happiness, and comfort of the person injured during the accident. Pain and suffering can be an extremely costly liability expense, in some cases going up to millions of dollars.
Working with a Non-Profit
An individual you’ve served through a charitable or religious organization may sue you for inappropriate behavior. While some charitable organizations will cover the resulting costs of the suit, an individual may still sue you directly.
Even with the best intentions, you can still be held responsible for a liability claim or judgment that can wipe out your assets and future earnings. Reach out to our experts at Tompkins Insurance Agencies for an insurance policy that can help protect your assets and suits your needs.