Umbrella Insurance Claims In The Usa: Additional Liability Protection
Umbrella Insurance Claims In The Usa: Additional Liability Protection - An umbrella insurance policy through the AARP® Auto & Home Insurance Program of The Hartford1 can help protect you and your family if:
Umbrella insurance helps cover certain liability claims and lawsuits that exceed the limits of your auto or homeowner's insurance policies.
Umbrella Insurance Claims In The Usa: Additional Liability Protection
Your personal umbrella insurance policy does not cover every claim. For example, it does not cover losses related to your business. For that kind of claim, you need a commercial umbrella insurance policy.
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This infographic lists some of the most common situations that an umbrella insurance policy may or may not cover:
We are here to help you get the coverage you need and answer your questions about obtaining a personal umbrella insurance policy. We offer flexible options with $1 million, $2 million or $5 million in coverage.**
Get an umbrella insurance quote today by calling 888-546-9099. You can also get a personal umbrella policy while getting a homeowners insurance quote.
You can get great rates and coverage when you bundle insurance policies through the AARP Auto and Home Insurance Program of The Hartford.
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Summaries of coverages and policy features are for informational purposes only. In the event of loss, the actual terms and conditions set out in your policy will determine your coverage.
AARP and its affiliates are not insurers. Paid endorsement. The Hartford pays royalty fees to AARP for the use of its intellectual property. These fees are used for the general purposes of GAAP. AARP membership is required in most states for program eligibility.
The AARP Auto Insurance Program of The Hartford is underwritten by Hartford Fire Insurance Company and its affiliates, One Hartford Plaza, Hartford, CT 06155. It is underwritten in AZ by Hartford Insurance Company of the Southeast; in CA, by Hartford Underwriters Insurance Company; in WA, by Hartford Casualty Insurance Company; in MN, by Sentinel Insurance Company; and in MA, MI and PA, by Trumbull Insurance Company. The AARP Home Insurance Program of The Hartford is underwritten by Hartford Fire Insurance Company and its affiliates, One Hartford Plaza, Hartford, CT 06155. It is underwritten in AZ by Hartford Insurance Company of the Southeast; in CA by Property and Casualty Insurance Company of Hartford; in WA, MI and MN, by Trumbull Insurance Company; in MA, by Trumbull Insurance Company, Sentinel Insurance Company, Hartford Insurance Company of the Midwest, and Hartford Accident and Indemnity Company; and in PA, by Hartford Underwriters Insurance Company. Home product is not available in all areas, including the state of FL. Savings, benefits and coverage may vary and some applicants may not qualify. The program is not currently available in Canada and US territories or possessions.
1 In Texas, the Auto Program is underwritten by Redpoint County Mutual Insurance Company through Hartford of the Southeast General Agency, Inc. Hartford Fire Insurance Company and its affiliates are not financially responsible for insurance products underwritten and issued by Redpoint County Mutual Insurance Company. The Home Program is underwritten by Hartford Insurance Company of the Southeast. Chances are slim that you will lose a lawsuit for an amount greater than your existing insurance will pay. But if you ever find yourself in that situation, you could lose all your savings and other assets. A good umbrella policy can prevent that nightmare from happening.
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Umbrella insurance is a type of personal liability insurance that can cover claims that exceed the limits of your regular insurance policy. Below, we'll take a closer look at this extra liability coverage: how an umbrella policy works, who needs it, how much it costs, and what it won't cover.
Umbrella insurance is a type of personal liability insurance that can be indispensable when you find yourself liable for a claim that is greater than what your home owner's insurance or auto insurance will cover. If you own a boat, umbrella insurance will also pick up where your watercraft liability insurance leaves off.
Umbrella insurance also covers certain liability claims that those aforementioned policies may not, such as libel, defamation and false imprisonment. And if you own rental property, umbrella insurance offers liability coverage beyond what your renter's policy covers.
Here are some examples of incidents where an umbrella policy can provide financial coverage if your homeowner's insurance or auto insurance isn't enough:
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As you may have learned from these examples, umbrella insurance covers not only the policyholder, but also other members of their family or household. So if your teen isn't the best driver, you can sleep better at night knowing that your umbrella policy will cover the injured parties' medical bills if your child is found liable for a major accident. That said, make sure you understand how your policy defines a household member so you'll actually have the coverage you need.
You may also have noticed that even though umbrella insurance provides coverage on top of your homeowners and auto insurance, the incident does not have to involve your property or your vehicle for your umbrella insurance to cover it. You are also covered worldwide, with the exception of houses and cars you own under other countries' laws.
There is definitely a fear factor involved in the decision to purchase umbrella insurance. Many insurance companies say you need this because of the lawsuit-happy world we live in, where anyone can sue you for anything and ruin you financially.
You can find many personal liability horror stories in the news, where juries have awarded multimillion-dollar judgments to the victims that individuals had to pay. But how likely are you to find yourself in such a situation? Do you really need umbrella insurance?
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You may hear that you need to buy umbrella insurance if the total value of your assets, including regular checking and savings accounts, retirement and college savings and investment accounts, and home equity exceeds your auto or homeowner's liability limits. The idea behind this advice is that you want enough liability insurance to fully cover your assets so you can't lose them in a lawsuit.
However, jury awards can easily exceed insurance policy limits. The real question you have to ask yourself is, am I at risk of being sued? Everyone is, so in a sense, umbrella insurance makes sense for everyone. It's a small price to pay for the extra peace of mind.
Some people are more likely to need an umbrella policy than others. If you engage in some activity that puts you at greater risk of excess liability, then you are a good candidate for an umbrella policy. Risk factors for personal liability include owning property, renting it out, employing domestic staff, having a trampoline or hot tub, hosting large parties and being a well-known public figure.
Having a teenage driver in the family also puts you at risk, just like owning a dog or owning a house with a swimming pool. Basically, the more likely you are to be sued, the more strongly you should consider purchasing umbrella insurance. But anyone who is risk-averse will sleep better at night knowing they are protected by an umbrella policy.
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Let's say your homeowner's insurance has a personal liability limit of $300,000. You're having a big holiday party, and one of your guests slips and falls on your icy front steps. She ends up with a concussion and some astronomical medical bills and decides to sue you. In court, the jury sides with your party guest and awards her a $1 million verdict. This judgment is $700,000 more than your homeowner's insurance liability limit.
Without a personal liability umbrella, you have to pay that $700,000 out of pocket. The money will have to come from your retirement account, your main source of savings. The loss is devastating and means you will have to work another 10 years, find a better paying job, or drastically cut your expenses to replenish your savings and get back on track to be able to retire.
But if you have $1 million in umbrella insurance, your umbrella policy will cover the portion of the judgment that your homeowner's insurance doesn't, and your retirement savings will remain intact. The umbrella policy also covers any attorney fees and other expenses related to the lawsuit that are not covered by your homeowner's policy. That coverage is in addition to the $1 million.
If you have a $5,000 deductible on your homeowner's insurance, you will pay that amount out of pocket. Then your homeowner's policy will pay the next $295,000, bringing you to the $300,000 policy limit. Your umbrella insurance does not have a separate deductible in this case because the homeowner's policy covered part of the loss. Your umbrella policy pays the remaining $700,000 of the judgment plus legal fees, so you are only $5,000 out of pocket for the $1 million judgment.
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What if you are found liable in a case where your home owner or auto insurance did not apply? Then you pay an umbrella insurance deductible, called self-insured retention, before the umbrella policy took effect.
The cost of an umbrella liability policy depends on how much coverage you buy, the state you live in (insurance rates vary by state) and the risk the insurance presents you to the insurance company. The more houses or cars you own, and the more households
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