Understanding Florida Umbrella Insurance

All Florida homeowners should understand how to protect themselves in case of an accident. As everyone knows, insurance is a necessary element of home responsibility, but it doesn’t always cover all aspects of damage, or damage’s full extent.

Let’s say you’re in an unfortunate automobile accident and seriously injure another person. A thorough investigation shows that you were at fault. Your insurance policy will cover up to a certain limit, but what if the person needs a greater compensation to manage their ongoing life? Or, what if your tenant’s dog bites a passer-by and though they pay for the initial medical costs, the victim now wants additional compensation for plastic surgery?

In both of these scenarios regular insurance played its part, but then was exhausted. Umbrella insurance would be the key to solve both issues. There are two main advantages of Florida umbrella insurance:

1)            It covers the potential cost needed above and beyond your regular homeowners and auto insurance policies.


2)            It covers claims that are excluded by other policies, such as slander, insurance on rental units or false arrest.

The thing to understand about this type of insurance is that it may seem like “extra” and unnecessary, however in some situations it is crucial to giving you the protections you need. As with the above situations, homeowners who do not have umbrella coverage, would have to look to their own personal assets as a means of covering additional financial requirements. This financial strain could be crippling to a household, whether or not the funds were accessible. It could mean selling valuable and cherished assets, cashing in retirement accounts or taking out high-interest loans.

Here’s a real-life example with numbers: Let’s take another automobile accident in which you are found to be at fault. In this scenario the victim has $500,000 in damages. The bodily injury included in your policy is $200,000. That means the policy will cover $200,000 of the medical injuries, but where is the additional $300,000 going to come from? Without umbrella insurance, you would have to come up with the difference through personal assets.

With Florida umbrella insurance there are general coverages that it provides: injuries, certain lawsuit situations, damage to property and personal liability. As with all insurance, be sure to understand what is covered. For example, one aspect of umbrella coverage is “shock/mental anguish.” Be sure to discuss with your insurance agent what that means. What are the general scenarios in which that coverage would be triggered?

Having Florida umbrella insurance is important. Be sure you understand the current coverage of your policy and what umbrella insurance can add to that. At the end of the day, this type of insurance can be very important and provide you with the protection you could end up needing.