Umbrella insurance typically provides additional liability coverage beyond the policyholder’s basic coverage limits. It also pays for some of the liability costs excluded from the basic liability policies. If your risk of being sued is exceptionally high, you should carry umbrella insurance. Here are eight common liability claims that require umbrella coverage:
- Dog Bites
- Volunteering for NPOs and Charitable Organizations
- Accidents Involving Teen Drivers
- Pain and Suffering
- Injury or Damage Caused by Intoxicated Party Attendee
- False Arrest and Slander
- Legal Expenses
- Homeowners Liability
Every year, at least 800,000 people in the U.S. receive treatment for dog bites. Considering the high cost of healthcare in the U.S., the costs of treating a dog bite can add up quickly. If your aggressive dog bites a passerby, your home insurance will cover the costs up to the limits of the liability coverage. Umbrella insurance will pay for the rest of the liability costs, which include medical expenses and legal costs in case of a lawsuit.
People working for non-profit and charitable organizations face the risk of being sued for negligence, misappropriation of funds, and personal injury. Although some non-profits pay for their liability, it is prudent to get the right umbrella insurance for adequate coverage.
Compared to motorists aged 20 and older, teen drivers aged between 16 and 19 are three times more likely to be involved in a fatal crash for every mile driven, according to the Centers for Disease Control and Prevention (CDC). This shows that having a teen driver in your household increases the liability risk. If this driver is part of your auto liability coverage, extra coverage in the form of umbrella insurance is necessary to avoid underinsurance.
If you are at fault in a serious car crash, the other party can sue you for pain and suffering. If the lawsuit turns out to be expensive, your auto liability insurance covers the resulting liability claims fully. In such a case, once your underlying policy hits its coverage limits, your umbrella policy would kick in and cover all the remaining costs, including the legal fees.
If you host a party at home and an intoxicated attendee causes third-party bodily injury or property damage, the authorities will hold you liable for the damage. If your home liability insurance isn’t enough to pay for all the damages caused, you will need umbrella insurance for adequate coverage.
Umbrella insurance also covers the excess expenses emanating from lawsuits related to slander and false arrest. This includes both legal costs and damages. Therefore, you should add an umbrella endorsement to your general liability policy.
The cost of hiring an attorney in the U.S. ranges anywhere from $100 to $400 per hour or even more, depending on the experience and specialization of the lawyer. This means that a plaintiff can spend a lot on defense, depending on the complexity and length of the case. Without adequate liability insurance, such a plaintiff may not afford defense costs, and paying them out of pocket will likely cause financial harm. The right umbrella insurance will help offset the expenses.
The liability portion of home insurance policies covers liability claims related to third-party property loss or bodily injury, although only up to the set coverage limit, which may be inadequate in some cases. For instance, homeowners insurance usually excludes or offers limited coverage for high-risk items such as swimming pools and trampolines. Therefore, if you have such items on your property, you should buy umbrella insurance too.
Do you have sufficient liability insurance coverage to avoid paying for liability claims out of pocket? At Spotlight Insurance Agency, we can help review your existing policy and close any coverage gaps with tailored umbrella coverage. Contact us today to get started!