Is Umbrella Insurance Necessary in North Carolina?

Umbrella insurance provides additional liability coverage beyond the limits of your primary liability insurance policies. For instance, if someone is injured at your home and files a personal injury lawsuit against you, your personal liability coverage covers the costs up to your policy limits. Umbrella insurance will come in to cover the balance, and hence, save you from out-of-pocket costs. It is worth noting that umbrella insurance is ideal for people with higher liability risk exposures. Read on to learn more about umbrella insurance in North Carolina.

How It Works?

Umbrella insurance typically covers claims over the specified policy limits of your existing liability policies, including auto and homeowners insurance. Consider a scenario where you are held liable for third-party property damage worth $600,000, but your homeowners insurance coverage limit is $300,000. Without umbrella insurance coverage, you would need to pay the remaining $300,000 out of pocket or risk losing your assets and savings.

What Umbrella Insurance Covers?

This policy typically covers excess liability losses caused by named perils including medical expenses, legal defense costs, property repair or replacement costs, and monetary compensation for lost income. Common claims covered include third-party bodily injury, property damage, defamation, and false imprisonment.

Umbrella Insurance Exclusions

Umbrella insurance does not cover the following:

  • The policyholder’s bodily injuries or property damage
  • Intentional and criminal acts such as arson and vandalism
  • Liability costs emanating from the policyholder’s business, unless you have a commercial umbrella policy

Is an Umbrella Insurance Policy Mandatory?

Umbrella insurance is not required by the law and is only useful if you are susceptible to higher liability claims than what your primary policies can cover. For instance, a politician is more likely to be sued for defamation, so they will likely require umbrella insurance coverage.

Consider buying this coverage if you:

  • Have pools, pets, and trampolines on your premises
  • Frequently host gatherings in your home
  • Own high-value assets
  • Have a teenage driver listed on your auto insurance policy
  • Are a public personality
  • Serve in the law enforcement sector
  • Regularly post public reviews about businesses
  • Participate in risky sports activities that could injure others, such as skiing, hunting, or surfing

How Much Umbrella Coverage Is Needed?

The amount of coverage you need depends on your net worth. For example, if you have assets worth $1 million, you may go for umbrella insurance worth $1 million or more. Remember the minimum coverage limit of umbrella insurance is $1 million.

Cost of Umbrella Insurance

The average cost of $1 million worth of umbrella insurance coverage ranges anywhere from $150 to $300 per year. Remember, you may need to pay more for your other insurance policies if you need to increase your liability coverage to meet the minimum requirement of umbrella insurance.

Get the Right Umbrella Insurance Coverage at Pittman

Primary liability insurance policies have specified policy limits that may be inadequate for your needs. For cost-effective umbrella insurance in NC that adequately protects you and your family, contact our experts at Pittman Insurance Group, LLC today!

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