Michigan Umbrella Liability Insurance

Michigan Umbrella Liability Insurance FAQs

What is Umbrella Liability Insurance, and How Does it Work?

Umbrella liability insurance is an additional liability insurance that protects more than just your home, car, and rental property. The main goal that this type of insurance has is to protect your assets when an unexpected event occurs, such as a tragic accident that leads to serious damage or injuries to others. It also protects you against potential lawsuits if a judgement exceeds your home or auto policy limit.

Why is Umbrella Liability Insurance so Important?

Umbrella liability insurance is important because it will protect your assets. A few of your assets that will be protected are your home, investment accounts, retirement accounts, checking and savings accounts, and more. Suppose you do not have enough liability insurance and have not considered adding an umbrella liability policy. In that case, your assets may be exposed as you most likely cannot cover all the costs. Most people choose to purchase umbrella liability insurance as it is a great way to prevent any potential financial mishaps that can happen from one unexpected accident.

How Much Umbrella Liability Insurance Do You Need?

Deciding how much umbrella liability insurance you need may be difficult and complex. However, there are a few important things to consider when making this decision, which include the following:

• The possible risks that may arise
• Value of your assets
• The possible loss of any future income

Your insurance agent can assist you with weighing out all the factors and making the best decision that matches your needs.

What Does Umbrella Liability Insurance Not Cover?

Umbrella liability insurance does not cover your injuries or damage to your property. It also does not cover your business liability unless you buy a commercial umbrella liability insurance policy instead of a personal one.

If you have breached a contract, your umbrella liability insurance will most likely not cover this liability. For example, if a contractor files a lawsuit against you for failing to pay for the work they have completed under a contract you signed, your umbrella liability insurance will not help you with this. In addition, if you intentionally physically injure someone or commit a crime, your umbrella liability insurance will not cover this.

Are You Required to Have Umbrella Liability Insurance?

You are not legally required to have umbrella liability insurance. However, if you have valuable assets or a chance of being sued, it is recommended to purchase umbrella liability insurance. The following are a few common reasons why people choose to buy this type of insurance:

• They own property
• They have a large number of assets or savings
• They own items or products that could cause injury to others (trampoline, pool, gun, pet)
• They are a landlord
• An inexperienced driver lives in their home
• They often host parties and events in their home

Always remember that umbrella liability insurance is an additional policy you can have that protects you, your assets, and your property when claims are filed.