Minnesota Umbrella Insurance

Umbrella insurance, also known as excess liability insurance, is a type of personal liability insurance that covers claims in excess of regular homeowners, auto, or watercraft policy coverage. It can also cover claims that may be excluded by the primary policies. These may include, but are not limited to, false arrest, libel, slander, and liability coverage on rental units you own. In the state of Minnesota, umbrella insurance has its unique features and requirements. This guide provides a comprehensive look into umbrella insurance in Minnesota, its benefits, how to get it, and much more.

What is Umbrella Insurance?

Umbrella insurance is a form of liability insurance that will supplement your basic liability policies, such as your auto, home or renters insurance. It provides a higher level of coverage, which kicks in when the liability on these other policies has been exhausted. For instance, if you are at fault in a car accident that injures another driver, your regular car insurance may cover the other driver up to the limit you selected, say $250,000. But what happens if that driver's medical bills and other damages total $500,000? If you have umbrella insurance, your policy will pay the remaining $250,000. Without it, those costs are out of your pocket.

In Minnesota, like in many other states, umbrella insurance is not mandatory. However, it is highly recommended for individuals with significant assets or high-risk factors such as a swimming pool or trampoline on their property. It is also beneficial for those who engage in activities that increase their risk of lawsuits such as being a landlord or volunteering your services to the public.

How Does Umbrella Insurance Work?

Umbrella insurance comes into play when your basic liability limits are exhausted. The umbrella policy will pick up the remaining costs. For example, if you have a car insurance policy with a liability limit of $500,000, but you are at fault in an accident that causes $1 million in damage, your car insurance will pay out its $500,000 and then your umbrella insurance will kick in to cover the remaining $500,000.

Umbrella insurance also provides coverage for legal defense costs, which can quickly add up even if you win your case. It's an extra layer of protection.

Additional Liability Coverage

The primary benefit of umbrella insurance is the additional liability coverage it provides. This coverage comes into play when the liability limits of your other insurance policies have been reached. This can be particularly beneficial in serious situations where medical bills, property damage, and legal fees can quickly exceed standard policy limits.

For example, if you are found liable for a car accident where multiple people are injured or there are high medical bills, your standard auto insurance may not be enough to cover all of the costs. In this case, your umbrella policy would kick in to cover the remaining costs.

Protection Against Lawsuits

Umbrella insurance in Minnesota can also provide protection against lawsuits and other legal actions. If you are sued for damages that exceed the liability limits of your car, home, or boat insurance, your umbrella policy can help cover the costs. This can include legal fees, court costs, and any settlements or judgments against you.

Without umbrella insurance, these costs would have to come out of your own pocket. This could potentially lead to financial ruin, especially if the lawsuit results in a large judgment against you.

Umbrella insurance in Minnesota can provide an additional layer of protection against large liability claims that exceed the limits of your other insurance policies. It can protect your assets, cover legal fees, and give you peace of mind.

While it's not required, umbrella insurance is highly recommended for anyone with significant assets or high-risk factors. Working with an experienced insurance agent can help you understand your risks and find a policy that fits your needs and budget.

Remember, the cost of an umbrella policy is small compared to the peace of mind it provides. Don't wait until it's too late. Protect yourself and your assets with umbrella insurance today.