The intent of personal liability insurance is to protect the insured from staggering financial jeopardy if involved in an event that causes damage to another’s property or bodily harm to others. It is also designed to protect business professionals from overwhelming financial exposure in the event of harm caused to others during the course of business.
Three Common Kinds of Protection Automobile Property and Liability Insurance
All car owners in 49 of the fifty states are required to carry minimum property and personal liability insurance. These are statutory minimal requirements. The amount of required coverage varies by state. Many motorists realize that the state mandated coverage does not offer enough protection to them and frequent by policies known as 100/100/300. This means that they are covered for $100 thousand dollars in property damage for an accident and also covered for $100 thousand per person for medical care per person per accident to a maximum of $300,000 per accident. These coverages also include protection in the case of a fatality.
Homeowners, Condo Owners and Renters Insurance
All of these policies provide coverage in the event of theft or fire in the insured homes. Most policies also include protection in the event someone suffers bodily injury while at your residence. Because this coverage is inexpensive most people who carry this kind of insurance have coverage for $100 thousand in medical payments or death benefits.
Professional Liability Insurance
In addition to professional liability insurance providing coverage for harm done to others by a business professional it also covers the legal expenses attendant to either defending the claim in court or negotiating a settlement.
However, all of the three kinds of policies are usually insufficient to protect high net worth individuals should they be involved in an incident that causes bodily harm or a fatality. Thus, their insurance advisors usually explain how important it is for them to acquire an "umbrella policy" to increase their protection against financial claims.
Personal umbrella liability insurance gives insureds additional liability coverage that covers any excess damage or injury that exceed your auto, home or professional liability insurance coverage. It is known as umbrella insurance, "additional personal" liability and "personal excess."
The more you have the more protection you need as your exposure increases in direct correlation with your wealth. It is best to discuss your personal liability coverage with your insurance advisor.