Burkhart Insurance Agency, Inc.

If you are ever involved in a law suit, it is imperative that you have insurance to cover your legal liability. Umbrella policies supplement the liability coverage you already have through your home and auto insurance, and provide an extra layer of protection. Umbrella policies aren't just for the wealthy - they're for anyone who has assets that might be at risk if they cause a serious accident. If you don't have enough liability coverage to resolve a claim or a lawsuit, the person bringing the action might go after your home or your other assets to pay for damage. Umbrella policies cover the excess liability of damage claims that you, your dependents, or even your pets may cause.

Normally, umbrella policies begin coverage after the liability insurance in your homeowners and auto policy runs out. For example, if you have a home insurance policy with liability coverage of $100,000.00, the umbrella policy will pay claims above that amount, up to the umbrella limit selected. It will also provide additional coverage over and above the amount you're entitled to under your auto policy. Because your auto or home insurance policy will pay out first, they're considered primary to the umbrella policy, and most of the risk is assumed under the primary policy. This enables insurers to help keep the premiums for umbrella policies at a lower rate.

Many insurance companies will not sell an umbrella policy unless your primary insurance (i.e. auto and homeowners) is covered by them as well. In addition, they may require minimum liability coverage on your primary policies in order to be covered under umbrella coverage, and stipulate a deductible on the coverage.

When you buy a personal liability umbrella policy, you're buying broader coverage in case you're sued. The company selling the umbrella policy agrees to cover you if you cause bodily injury, property damage, or personal injury to others. It is the personal injury protection that goes beyond the coverage in your auto and homeowners policy.

Generally, personal injury encompasses false arrest, false imprisonment, malicious prosecution, defamation, invasion of privacy, and wrongful entry, just to name a few. Most primary policies cover bodily injury and property damage, but not personal injury.

Protection against claims and lawsuits does more than simply pay for the damages. Even if a lawsuit against you is unjustified or erroneous, you still face the expense of defending yourself. Your liability coverage will pay for lawyer fees and defense costs, which can add up quickly.

However, even if you purchase the maximum coverage available in a personal liability umbrella policy, you can't protect yourself against every possible claim or lawsuit. There are exclusions in these policies as there are in every insurance policy. For instance, an umbrella policy will not cover claims arising out of a business endeavor. If you own a business you will need to buy a business insurance policy to be covered against liability claims. Additionally, intentional acts are not covered un umbrella coverage, and some state laws may also stipulate what coverage is allowed, for instance coverage of punative damages.

How do you know if you need an umbrella policy? Although they are relatively inexpensive, no one wants to purchase any unnecessary insurance coverage. Whether or not you need umbrella coverage depends mostly on your risk of being sued. If your family has a swimming pool or trampoline that might pose a risk of injury, you might consider extra coverage. But before making your decision, compare the umbrella premium with the cost of raising the liability limits of your homeowners and auto policies. This might be all you need do in order to ensure the proper liability coverage without an extra insurance expense.

Whatever your decision, the insurance professionals at Burkhart Insurance Agency, Inc. will be happy to assist you with your insurance needs.