Anybody can find themselves facing a liability lawsuit. Fortunately, most insurance products include coverage against this risk. If you are among the Arkansas residents who have a lot to lose, umbrella insurance can better protect your assets by providing additional personal liability protection.
Local independent agents are available to help you obtain and review customized quotes from some of the best umbrella insurance companies in Arkansas. That way, you can be sure you are getting the extra coverage you want at the most competitive price.
Contact an insurance agent near you to begin your search for the right umbrella insurance policy.
What Is Personal Umbrella Insurance?
Umbrella insurance is a secondary insurance policy that significantly boosts the maximum liability coverage provided by your other insurance products.
If you are responsible for someone else’s injuries, property damage, or financial losses and your financial obligations exceed what your car, home, renters, or other insurance policy can cover, your umbrella insurance will kick in and cover the overages up to its own coverage limits.
Umbrella insurance policies usually start at $1 million in coverage and can be increased in value by $1 million increments. This means that if you are sued, you will be able to protect your property, savings, and other assets with an extremely high amount of liability coverage.
How Much Does Personal Liability Umbrella Insurance Cost in Arkansas?
Personal umbrella insurance is surprisingly affordable. The Insurance Information Institute states that most people can purchase $1 million worth of extra liability coverage for as little as $150 to $300 a year.
It costs even less to add on more coverage. You can get an additional $1 million in liability protection for about $75 a year, and every additional million you purchase after that will only cost about $50 a year.
This means that if you have inherited a large family estate and you want to have great coverage against liability lawsuits, you can purchase a $10 million personal umbrella insurance policy for around $700 a year. That’s a very small price to pay for an extremely large amount of liability coverage.
What Does Personal Umbrella Insurance Cover?
Personal umbrella insurance is designed to cover your liability overages if the limits of your primary insurance policies are too low to meet your financial obligations. You can use your policy to boost the liability limits of these coverages.
- Vehicle coverage, including car insurance, motorcycle insurance, and RV insurance
- Primary home coverage, including homeowners insurance, renters insurance, condo insurance, and townhouse insurance.
- Other coverage, including things like landlord insurance, boat insurance, ATV insurance, and other policies that include personal liability coverage.
Read on to get more details about these types of coverage.
How Can Personal Umbrella Insurance Help Vehicle Owners in Arkansas?
In Arkansas, drivers are required to carry a minimum of $25,000 per person/$50,000 per accident worth of bodily injury liability coverage. Many drivers choose to purchase coverage in much higher amounts, but insurance providers typically max out their offered liability coverage at $500,000.
This can mean expensive trouble for you if you cause a collision that results in someone else sustaining significant injuries that require long-term care, or worse, if someone is killed in the collision.
According to the CDC, the average cost of a collision-related death in Arkansas is more than $1.54 million. The death of a young adult is the most expensive due to the estimated loss of earning potential.
If you only have the maximum amount of liability coverage offered by your car insurance provider, your financial obligations can easily exceed $1 million in the event that you cause a fatal accident. An umbrella insurance policy can help you maintain your assets and financial standing.
To qualify for umbrella coverage for your car, most insurance providers will require you to carry at least $250,000 per person and $500,000 per accident worth of bodily injury liability coverage in your primary auto insurance policy.
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How Can Personal Umbrella Insurance Help Homeowners and Renters in Arkansas?
Whether you own or rent your home, you probably already have a good bit of personal liability protection through your primary homeowners, renters, or condo insurance policy. These policies typically provide up to $500,000 in personal liability coverage, which, in most cases, is more than enough.
However, you never know when a personal liability lawsuit is going to become extremely expensive. This is most likely to happen if your actions or negligence can be blamed for someone experiencing significant injuries or a fatality.
For instance, as a homeowner, you can be looking at a very expensive lawsuit if a neighbor’s child falls off the trampoline in your backyard and suffers brain damage, or if you are having a party and several people are seriously injured when your poorly maintained deck collapses.
To qualify for umbrella coverage, most insurance providers will require you to carry at least $300,000 in liability coverage in your home, renters, or condo insurance policy.
How Else Can Personal Umbrella Insurance Help Arkansas Residents?
If you have any other policies like boat insurance, ATV insurance, or landlord insurance, your personal umbrella insurance can help you be certain that you will have sufficient liability coverage if the unthinkable happens.
If you happen to own a small business, be aware that personal umbrella insurance does not boost the liability insurance in your business insurance policy. If you want more coverage for your company, you will need business umbrella insurance.
What Is Not Covered by Arkansas Umbrella Insurance?
As with any insurance policy, umbrella insurance has its limitations. You should not expect your policy to cover these situations.
- Professional liability lawsuits
- Injuries or property damage that you inflicted intentionally and/or while committing a crime
- Injuries or property damaged sustained by you or members of your household
A good insurance agent will make certain that you understand all of your umbrella insurance policy’s coverage exclusions before you purchase your coverage. That way, you will not find yourself experiencing any unwelcome surprises later.
How Much Personal Umbrella Insurance Do I Need?
Nobody expects to one day be responsible for a very expensive accident, but everyone should be prepared for that possibility.
If you do not have enough personal liability coverage to cover your financial obligations, you can see many of your assets seized such as money held in brokerage accounts, valuable property, and savings. The more you have to lose, the more important it is to have a lot of coverage.
Many financial advisors recommend that you have a coverage amount that is equivalent to your estimated net worth. This means that if your net worth is calculated at $1.8 million, you may want to purchase a $2 million umbrella insurance policy.
Personal Excess Liability Insurance vs. Umbrella Insurance: What Is the Difference?
When insurance companies refer to excess liability insurance and umbrella insurance, they are sometimes referring to two different kinds of policies, though the difference is subtle.
Excess liability insurance policies work in the same way as umbrella insurance, but they are designed only to boost the liability coverage of one specific primary policy.
Umbrella insurance, on the other hand, is designed to provide you with extra liability coverage for all of your insurance policies that include personal liability protection.
How Can Independent Agents in Arkansas Help You Find the Best Umbrella Insurance Policy?
When you are considering buying an umbrella insurance policy, a local independent agent can be a great source of information.
These knowledgeable agents can explain the details of your coverage and can obtain customized quotes from some of the best insurance companies in the area. They can also help you with any other insurance concerns you may have.
It doesn’t cost anything to work with an independent agent. Find an experienced insurance agent near you to learn more.