If you own a homeowners or renters insurance policy there will be personal liability insurance coverage included. It can protect you in the event you become liable for an accident in or outside of your home and are responsible for medical costs of an injured party. It can also shield you from the expenses related to damages you may be liable for away from your home.
What could be wrong with that?
The problem, you see, is that a standard home or renters policy only covers costs up to the insurance limits it comes with. If you are strapped with a larger bill that exceeds those limits, there’s no one else to cover you except… yourself and your wallet.
So the obvious question looms.
Do I or don’t I need to buy better personal liability coverage than that what is provided in the standard insurance for homeowners and renters?
In order to assess the situation properly, you’ll need to know understand how a personal umbrella liability insurance policy works.
Personal Umbrella Liability coverage can shield you from the costs you may be liable to pay for – doctor, hospital and other medical costs over the standard insurance limits – in relation to an accident or event on your property that resulted in injury to another person. It can also pay for costs that exceed the standard insurance policy limits in regard to property damage. In addition, it can help pay for insurance claims that may not otherwise be covered.
The following are associated claim scenarios to study:
1. A homeowner had a visitor at his home. The visitor slipped and fell onto the driveway and incurred a serious injury. Though he was liable for medical costs, the homeowners personal umbrella liability policy picked up the $150,000 tab.
2. A policyholder was walking his dog when a youngster approached them. The dog lurched forward and bit the lad’s ear. The coverage kicked in and paid for the $60,000 medical bill.
3. A policyholder hosted a graduation celebration. One of the guests drove off after drinking a few glasses of alcohol. His impaired driving caused him to drive erratically and he eventually crashed into oncoming traffic, and resulted in a fatality. The family of the victim sued the party host for $1,000,000.
4. With the intent to move into a home he had rented out, a landlord sent a 60-day notice to his tenants. Because he disregarded a stipulated law that under the circumstances, he must move into the vacated property within 90 days of the notice, the landlord was sued for $20,000 for wrongful eviction by his former tenants.
5. It poured and poured and poured until a condominium owner’s drain pipe became blocked. Unfortunately, the water built up and overflowed, resulting in damage to the condo below and liability for the first condo-owner. The $120,000-worth of damages was covered by personal umbrella insurance.