What is umbrella insurance? Umbrella cover refers to excess liability insurance, which is also known as umbrella policy and is commonly used on the insurance of motor vehicles. It covers liability for accidents not covered by other insurance schemes and can be found in different packages and policies. There are two types of umbrella policies, one being general liability and the other containing specialized coverage of particular vehicles, buildings, and events.
General liability coverage protects against accidents where passengers on the road are involved, but which do not involve the insured vehicle. The type of accident or events covered can include medical fees of passengers, property damage (including any damage done to the insured vehicle), personal injury claims, and any liability claims.
Many umbrella insurance policies also provide coverage for legal costs, loss of wages and business interruption due to an accident, damage to the property of the insured person, and for property damage or loss of property. In some cases, umbrella insurance also covers the personal property of the insured such as jewellery, paintings, and expensive collectibles.
Generally speaking, umbrella insurance policies cover only specific events. For example, you might find a general liability policy that covers accidental damage to the insured vehicle, property damage due to vandalism, etc, and one which cover personal injuries and legal costs from accidents that were not caused by the insured’s vehicle or property. The insurance company will usually offer these policies at the same cost or, if the cost is too high, they will provide the additional coverage without a separate policy.
When it comes to umbrella policies, the minimum amount of coverage that they offer usually depends on the nature of the events that would normally fall under their umbrella policy coverage. Some of the events which fall under umbrella coverage are;
Personal property: The contents of the car or other automobile are typically the most valuable part of the vehicle and thus the one that would most likely require the most expensive form of insurance cover. As the insurance policy covers the vehicle, the amount of liability protection will depend on how much coverage is provided for the vehicle itself. This could include bodily injury, property damage and personal property.
Damages: Damage to the motor vehicle is another event covered under umbrella policies. The protection of the vehicle is usually very small in comparison with the cost of replacing the vehicle.
Business interruption: The protection provided to businesses and other businesses from the risk of a damaged or destroyed vehicle or business due to a damaged or stolen vehicle is important when purchasing umbrella policies for motor vehicles. Certain policies may cover certain events including the purchase of a motor vehicle, the lease of a motor vehicle, and the operation of a motor vehicle in certain areas. Some of these policies will also cover the business interruption of a motor vehicle.
Vehicle damage: If you have an expensive vehicle that is not regularly maintained, the amount of liability coverage on your car insurance policy may be insufficient to pay for the repair or replacement of your vehicle. However, umbrella coverage on liability will cover any damage to the vehicle that occurs because of an uninsured driver. This will often be more than adequate in cases where the vehicle was used in an accident.
Liability coverage does not include damage to other vehicles, and this liability coverage is what is most commonly included in the umbrella of liability coverage. In some instances, the liability insurance of an automobile owner is referred to as the umbrella policy, and not the liability insurance of the motor vehicle’s manufacturer. For example, if you are buying insurance for a new car that you are leasing from an auto dealer, liability coverage will be included with the vehicle’s rental policy.
Sometimes, an insurance company will offer a discount if the vehicles have a safety or security device, as well as if they are equipped with immobilisers or anti-theft systems. The more costly the safety or security system, the greater the discounts that you can expect to receive when purchasing from that particular insurance company.
Finally, if you find yourself needing an umbrella policy on an automobile, it is very important that you fully understand the terms and conditions of your insurance policy, including the limits and exclusions. While many times, an insurance provider can adjust the limits of liability coverage to fit the vehicle you are driving, you should also be aware of any limitations of liability coverage that may apply to the coverage of your umbrella policy.