To say that we live in a litigious society is the understatement of the century. Personal injury cases and attorneys are big business, encouraging clients to file for millions for everything from broken bones to a sprained ankle. A case that goes the wrong way can drive someone right into bankruptcy, with the insurance you count on not enough to cover the damages you have to pay out.
There is protection available for those who get sued above and beyond what their regular insurance policy can cover. It’s called umbrella insurance. Learn about umbrella insurance, what it is, how it works, and why it’s so important to protect you from vicious and expensive lawsuits.
What Is Umbrella Insurance?
Umbrella insurance is aptly named, as it’s a form of insurance that functions as an umbrella against an oncoming storm. That storm is an expensive lawsuit that you can’t afford to pay. You need some sort of defense against those situations, and that’s an umbrella policy.
How Does It Work?
Consider, for example, if you get into an auto accident. The courts rule that you’re liable for $300,000 in damage, but your auto insurance policy only covers you up to $50,000. What will you do for the remaining $250K? That’s where an umbrella policy would come into play.
In general, your insurance policy is going to be for something specific. Car insurance covers car accidents. Health insurance covers healthcare costs. Homeowners insurance covers your house and what’s inside.
An Umbrella policy is more of a generalized insurance. It is a type of liability insurance, which means it only responds when you need protection from third party claims or lawsuits, but it will cover the ensuing legal expenses that may arise from a variety of catastrophic situations.
What Will It Cover?
Umbrella coverage is often broader than coverage provided by personal liability or auto liability policies. It is designed to cover or drop down to pick up shortfalls from the underlying policy it sits above. For example, your homeowner policy may have a dog bite exclusion, but your umbrella policy may not. You gain access to the umbrella coverage once you have exhausted the coverage in the underlying policy or you discover that other coverage may not exist. In some cases the broad nature of the umbrella will dramatically extend the scope of personal liability coverage.
There are, however, other expenses that this form of coverage doesn’t protect you against. These include but are not limited to medical malpractice, workers’ comp claims, damage caused by your business, or damage caused by intentional acts (if you attack someone deliberately, for example). As liability insurance, it only protects you from claims that arise from third parties usually involving some form of bodily injury or property damage. It will not respond if you get hurt and your own injuries exceed your normal coverage.
Umbrella Liability Coverage in Nevada
The truth is, umbrella insurance can come in handy for just about anyone at any time. You never know when disaster is going to strike that may leave you in crushing debt from a lawsuit. People sue at the drop of a hat these days, and you need to make sure that you’re protected. Even better, umbrella policies are reasonably priced. It’s a very small price to pay for the peace of mind that comes from the policy. If you think this kind of coverage might benefit you and would like more information, call the Nevada insurance agents at Harris Insurance today.