7 Types of Liability Claims That Are Covered by Umbrella Insurance

Umbrella insurance is a type of excess liability insurance that extends the liability coverage provided by your base insurance policies, such as your homeowners, renters, auto, or boat insurance. It also provides additional coverage that’s not provided by your base liability policies.

The policy covers various standard liability claims, including:

  1. Defense Costs

    The cost of defending yourself against a lawsuit can add up quickly. In fact, a single trial can cost thousands or even hundreds of thousands of dollars. With an umbrella policy, you do not have to worry about defense costs. Moreover, the remainder of your coverage that didn’t go towards your legal costs will cover the settlement or award.

  2. Teen Drivers

    Teen motorists aged 16 to 19 are the riskiest drivers in the US, accounting for up to 10% of fatal auto accidents every year. This means adding a teen motorist to your auto insurance exposes you to higher liability risks. Carrying an umbrella policy will extend the liability coverage provided by your auto insurance policy. Besides, teen drivers typically attract higher insurance rates. Therefore, having an umbrella policy can be a cost-effective way of getting an extra liability cover at a lower cost compared to increasing the liability coverage on your auto insurance policy.

  3. Intoxicated Party Attendee

    Consider this. After a party at your home, an intoxicated guest causes an accident while driving back to their place. Depending on the laws of your state, you may be held partially responsible for the incident. The victim’s lawyer may claim that you overserved your guest, you didn’t offer the guest a place to spend the night, or you didn’t confiscate the guest’s car keys. Indirect liability can be quite costly. Your umbrella policy can cover this liability claim if your home insurance policy can’t.

  4. Dog Bites

    If your dog attacks and injures a third party, you could be held liable for the resulting medical costs, lost wages, as well as pain and suffering. If your home insurance policy cannot cover these costs fully, your umbrella insurance will settle the extra expenses plus the related legal costs.

  5. Homeowners Liability

    Umbrella insurance can extend your homeowners’ insurance liability coverage. For instance, if someone is injured while using your swimming pool or trampoline, you could be held liable for such incidents. If the liability cost exceeds your homeowners’ insurance liability limit, your umbrella policy will kick in and provide additional coverage.

  6. False Arrest and Slander

    In case you’re sued for defamation, imprisonment, false arrest, or malicious prosecution/eviction, your umbrella insurance will help cover your defense costs. It can also cover the costs of fighting back and regaining your reputation. Typically, umbrella insurance is the only insurance policy that covers such incidences.

  7. Pain and Suffering

    If you’re liable for a particular incident, the victims of the incident may also sue you for their “pain and suffering”. This is an additional expense that’s associated with the psychological harm that emanated from the incident. Pain and suffering can amount to millions of dollars in liability expenses. Your umbrella policy can pay for these costs, especially considering the fact that the policy comes with a minimum limit of $1 million.

  8. Volunteering

    If you serve in religious or charitable organizations, you could be sued for inappropriate behavior or negligence. In this case, umbrella insurance will help cover your defense costs and any liability costs.

Final Word

An umbrella insurance policy in NC is a cost-effective way of protecting yourself against significant liability claims. For cost-effective liability insurance in NC that adequately protects you and your family, contact our experts at Pittman Insurance Group, LLC today!

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