Understanding Your Umbrella PolicyFebruary is a month dedicated to love, and we want to make sure that your loved ones are protected. A personal umbrella policy is a form of personal insurance, but it’s more commonly referred to as a type of “family insurance.” An umbrella policy sits atop your auto and homeowners policies to deliver an additional layer of protection, especially against catastrophic liability loss. In this month’s blog, we’ll review and highlight some examples to help you better understand your umbrella policy options.

What Does a Personal Umbrella Policy Cover?

The coverage from a personal umbrella policy is wide-reaching, extending beyond just incidents at your home. Typically, you’ll be covered even if you’re traveling outside of the country. Your umbrella policy may also help provide protection for something not covered by your home or auto policy. For instance, if a family member rents a snowmobile on vacation and is involved in an accident, your umbrella policy may help pay for the costs or repairs and medical bills of the injured parties.

Aside from just physical damage, umbrella protection can provide financial assistance if you’re being sued for libel or slander. Talk to your agent to be sure exactly who and what your policy covers and ask if there is any additional coverage you need to consider as everything is not covered by an umbrella policy.

Is My Entire Family Covered by My Personal Umbrella Policy?

People take out umbrella insurance for a variety of reasons. Exact coverage varies by each policy’s terms, conditions and limits. In Massachusetts, most umbrella policies provide coverage for the policyholder and their immediate family members living in the same household, with some exceptions. The following scenarios provide examples for the types of umbrella coverage available.

Example 1: Chaperone Chaos

If you or your spouse has volunteered to chaperone your kid’s school field trip to an amusement park, you both can be held legally responsible for anything that goes wrong on the trip. If a child under your care is injured during the excursion, that child’s parents might try to sue you for damages. A personal umbrella policy can provide coverage for such potential incidents, allowing you to chaperone a trip without worrying about potential financial risks.

Example 2: Teen Auto Troubles

If your recently licensed teenager causes a multi-vehicle accident, the resulting financial liability could be expensive. While a single car accident likely won’t exhaust your auto insurance policy, a multi-car accident might exceed the coverage. Personal umbrella insurance can cover expenses beyond those covered in your auto policy.

Example 3: Social Media Snafu

Some people, especially teens, don’t fully comprehend the power of social media. If your child makes a disparaging remark or unsubstantiated claim about someone on social media, that person might try to sue for libel. An umbrella policy may provide coverage for slander and libel, with most policies extending coverage to online statements.

Example 4: Man’s Best Friend Bites Back

Dogs are a man’s best friend, but at times they can be defensive about their homes. If your dog attacks a guest in your home, you may be responsible for any medical bills. Even a small bite could end up costing thousands of dollars. While some homeowners insurance policies provide liability coverage for dog bites, they typically restrict what breeds are covered. If your policy excludes your dog’s breed, umbrella insurance may help cover any financial responsibility you have for the incident.

Personal umbrella insurance policies can cover incidents like these and more, depending on the policy’s terms, conditions and exclusions. Contact us today and we’ll work with you to develop an umbrella policy that protects what is most important to you.

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