As a home or vehicle owner, you’re probably already familiar with liability coverage — the part of your insurance that protects you against injury or damage claims for incidents occurring on your property or involving your vehicle. But you may not know that in a lawsuit, a successful claim against you may far exceed the liability limits of your homeowner’s or auto insurance, costing you hundreds of thousands — even millions — of dollars.
Personal excess liability insurance — commonly called “umbrella” insurance because it sits atop your other property and casualty insurance — provides an extra measure of protection, insuring you against injury and damage claims that exceed the liability limits of your existing insurance.
For example, if the liability limit on your homeowner’s policy is $300,000 and a visitor is awarded $500,000 in a personal injury lawsuit against you, you’re liable for the remaining $200,000 — out of your own pocket. But with an excess liability or “personal umbrella” policy, you could enjoy coverage that takes effect where your homeowner’s policy leaves off.
Affordable umbrella policies can also provide primary coverage that’s not included in your home or auto insurance — for libel, slander or false arrest.
P&C stands for “property and casualty,” a type of insurance designed to compensate policyholders for loss of or damage to property such as a home, vehicle or personal possessions. P&C insurance often includes a deductible — the amount of a loss that an insurance policyholder has to pay out-of-pocket before reimbursement from the insurer begins. Property and casualty insurance also includes liability coverage that protects your assets in the event of a lawsuit or judgment against you.
Too often, rental-property tenants and condominium owners assume insurance coverage they don’t actually have. Renters may believe they’re covered by their landlord’s property insurance. But that coverage typically doesn’t extend to a renter’s possessions, and it doesn’t cover the renter’s liability in the event that a visitor is injured or suffers a personal property loss. Renter’s insurance is really quite affordable. Because the landlord’s insurance covers the physical dwelling, the renter’s insurance is designed primarily to cover personal property and liability.