Why you can’t buy umbrella insurance by itself

Why you can’t buy umbrella insurance by itself

Umbrella, a secondary coverage, requires a primary insurance policy first. You can purchase it once you own a home or commercial policy.

Your neighbor might mention their umbrella policy when you two talk about financial protection and whet your appetite for the same protection, but Brock and Poole Insurance Agency wants you to understand what this secondary insurance does and how it works first.

Let’s tackle the meaning of secondary insurance first. Before you can purchase a secondary policy, you must own a qualifying primary policy. A primary policy for these purposes refers to any policy that inherently includes liability coverage, such as homeowners’ or a commercial insurance policy such as a business owner’s policy (BOP). You add the secondary insurance of an umbrella policy to the primary policy to extend your liability coverage.

An umbrella policy kicks in once you have exhausted the primary policy. So, let’s say the bouncy room you rented for your child’s birthday party burst its flooring, injuring the five children playing inside. All five went to the emergency room in Collierville TN with broken bones. Ultimately, they all recover and go on to bounce another day, but your homeowner’s insurance liability coverage quickly gets eaten up, paying for their ER bills and the hospital stay of one of them that equaled $39,000. The $25,000 of liability coverage on your home policy paid for most of it, but the umbrella coverage that kicks in after the home liability pays out, so it covers the remaining $14,000. That means you pay nothing out of pocket.

Call Brock and Poole Insurance Agency serving Collierville, TN to learn more about the affordable option that umbrella insurance provides. You can enhance your liability coverage with an umbrella policy that protects you from out-of-pocket expenses.