NYC Insurance Blog

Do You Need Umbrella Insurance for Your Home?

Taking out an insurance policy for your home protects you from financial distress in case of an accident. However, many things could happen even with a homeowner’s policy, and your insurance company may fail to pay.

That is why most people resort to multiple covers to protect themselves and their property. You can have health insurance, but still, take out a vehicle cover. However, if you are well aware that the limit to either of your policies does not offer enough protection for your home, you may want to take on an umbrella insurance policy.

So, yes, if you feel like your standard liability coverage is not enough, umbrella insurance is one way to offer additional protection to your home. 

What is Umbrella Insurance?

Like its name, umbrella insurance is a personal cover that offers extra protection after your regular policy kicks in and reaches its limit. It may not be an extension of your homeowner’s policy, but in case of theft on your property, and the policy does not cover everything, the umbrella policy kicks in and tops up the balance. 

How Does Umbrella Insurance Work?

When you go to court, the chances of you losing a sum greater than your insurance limit are minimal. However, you may still have to pay the settlement out of your pocket in some cases. 

You could end up losing your savings. However, this does not have to be the case with an umbrella policy. Now, consider the following incident:

You are out of town for some business, but you left your son in charge of the house. While you are away, he throws a party and supplies the other kids with alcohol from your cellar. One falls out of the window and breaks a few ribs as the kids start going home, while another gets arrested for driving under the influence.

The children’s parents sue you for the medical expenses and bail. However, your insurance cover can only pay for the medical bill to a certain amount.

In this case, you can invoke the umbrella insurance to take care of the bail amount, should the court rule in their favor. The umbrella insurance also takes care of the excess medical bill that your standard policy does not cover.

Note, in this case, the umbrella insurance does not only cover you, the policy owner but also other members in your household who may find themselves in a bind. Being sure you are properly covered is important, Contact us today, for a FREE QUOTE.

How Do You Get Umbrella Insurance?

Umbrella insurance acts as a top-up cover for your homeowners and auto insurance. The incident does not have to involve your vehicle or home directly. 

You must first have an existing homeowners’ or auto insurance policy to purchase your umbrella policy. Remember, the umbrella policy only offers extra protection to your home after your homeowners’ policy reaches its limit. 

The premiums for your umbrella insurance will also depend on the coverage you purchase. However, compared to standard policies, umbrella insurance is cheaper.

Why Do You Need Umbrella Insurance for Your Home?

The value of the personal liability policy may run out on you. If your goal is to protect your financial stability, even when dealing with multiple lawsuits or burdening settlement claims, then an umbrella policy is what you need. 

For an umbrella cover of $1 million, you pay around $200 per year. That is how inexpensive the umbrella policy is, while it offers a significant boost to your regular liability cover.

As mentioned, the umbrella insurance covers 2 incidents: 

1. Events not included in your homeowners or auto insurance
2. The excess amount that your auto or homeowners policy does not cover.

So, if you are trimming the hedges on your property and accidentally drop a saw on your neighbor. However, the medical bills exceed your bodily injury cover. In this case, you top up the medical bills paid by your liability coverage with the umbrella cover. Having someone walk you through the process, and benefits may put your mind at ease, we are here to help with that!

Benefits of an Umbrella Insurance Policy

So, should I get umbrella insurance for my home or not? Below are reasons to get one:

• Umbrella insurance policies are low cost
• You can provide a comprehensive cover for your assets with the right type of umbrella insurance
• It is a flexible policy, meaning you can expand your coverage to give protection to whatever you want
• You get to enjoy some peace of mind knowing that you have protected your property and family
• If your insurance does not offer legal liability coverage, an umbrella policy can help pay for your legal fees when defending yourself against a lawsuit in court

Bottom Line

It is easy to see why you would need an umbrella policy for your home. Umbrella insurance is crucial if you have multiple household members who could get you in trouble anytime. However, only the right policy can guarantee you enjoy the full benefits of umbrella insurance. You can contact NYC Business Group for advice or help pick your best policy.

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