Umbrella Policy
What Does Umbrella Policy Mean?
An umbrella policy is a type of liability insurance that offers additional coverage beyond the limits of the policyholder’s home, auto, and watercraft policies. This added protection helps cover major liability claims that could exceed the coverage limits of standard policies and also includes coverage for various legal and personal liability situations that may not be covered by those policies.
Insuranceopedia Explains Umbrella Policy
An umbrella policy provides liability coverage not only for bodily injury and property damage to others, as expected, but also extends coverage to situations involving rental units and lawsuits for slander, libel, false arrest, mental anguish, and other personal liabilities. This extra protection is especially beneficial for individuals who own numerous or high-value assets and face a heightened risk of being sued. Premiums for an umbrella policy may be lower if purchased through the same insurer that issued their original property insurance; however, the policyholder generally needs to have base coverage above a certain threshold to qualify.
