To put it in the simplest form, umbrella insurance provides back up wherever your standard insurance falls short. Here is a scenario where umbrella insurance can be of help. You mistakenly hit another motorist from the rear, damaging his car, and causing bodily injuries to the driver and the other three people in the car.
That means you will be responsible for fixing his car and offsetting the medical bills of four people. And the amount paid by your insurance company, based on the auto insurance policy that you purchased, is grossly inadequate to cover the liabilities. Instead of having to complete the payment out of your pocket, the umbrella insurance coverage will provide the remaining payment.
So, you should understand that payment from your standard insurance policy must be exhausted before your umbrella insurance kicks in. However, there are cases that this insurance does not cover. Here is a list of what it covers.
Bodily injury coverage
This coverage provides the cost of medical bills and/or liabilities due to the injuries caused someone and it is established to be your fault. For instance, if there’s an accident and you are found to be at fault. If a guest in your home falls. If your dog harms someone or another dog, or your neighbor’s child falls in your yard. You umbrella insurance will provide the funds for any of these liabilities.
Property damage liability
This provides coverage for the damage or loss of another person’s property due to your negligence. If your standard insurance does not cover the whole liability, your umbrella insurance will kick in.
Owners of a rental unit
This is meant for landlords. In case there’s a crack in your sidewalk and this causes someone to trip and fall. You will be held responsible. This coverage will pay for that. Also, you may be liable for your tenant’s negligence. This policy will cover the liability.
In addition, your umbrella insurance will provide your legal fees in case of certain lawsuits. For more information about umbrella insurance, contact Redden Insurance Agency in Bradley, WV.