“Umbrella” insurance is a relatively inexpensive way to obtain significant increases in important insurance policy coverage limits.
Consumers are familiar with motor vehicle and homeowners insurance policies. They are separate policies covering separate and distinct risks. Each has its own policy limits and premium charge.
Umbrella insurance is a distinct coverage that is purchased as a stand alone package to supplement other, separate policies, such as the the motor vehicle and homeowners examples mentioned above.
Example: A motor vehicle policy may provide bodily injury coverage of $10,000 or even $100,000. Separately, the homeowners policy (similar renters insurance is also available) may provide the same coverage limit.
Bodily injury coverage pays for personal injuries and death caused by the insured’s negligence. Although $100,000 in coverage is enough in most cases, in some cases it is not nearly enough. Some serious injuries command $1,000,000 and more in damages, while wrongful death damages can reach into the multiple millions. In these cases, the protection afforded by the primary policy is insufficient. This is where umbrella coverage comes into play.
Umbrella insurance is designed to be available once the limit of the primary policy is exhausted. The advantages of umbrella coverage over simply increasing the limits in the primary policies are twofold: (1) Simplicity. One umbrella package covers multiple policies (in our example, motor vehicle and homeowners); and (2) Cost. The premium on an umbrella policy is less than the premium for the same coverage limit under the primary policy.
Why not, then, dispense with primary insurance and simply have umbrella coverage? Simple. Without the primary coverage, there cannot exist umbrella coverage. Umbrella coverage is a form of supplemental insurance.
Our law firm specializes in representing individuals and families who have been damaged by the neglect of others. These cases require a deep knowledge of insurance issues, such as the one given in this blog. We have that knowledge.
Contact us at 866-785-GALE or by email to learn your legal rights.
Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.