Umbrella insurance is insurance that provides protection beyond the limits (amounts) and coverages (scope) of other policies—and usually extends coverage to all members of your household. Umbrella insurance can provide coverage for defending against lawsuits and paying settlements and court judgments for claims that you or a member of your household caused another person to suffer personal injuries, property damage, or mental anguish—or committed the torts (wrongful acts) of libel, slander, or malicious prosecution against another person.

For example, umbrella insurance may provide coverage when you have exhausted (used) the policy limits of your homeowners insurance, automobile insurance, and watercraft (boat) insurance policies to defend and pay any covered claims.

Umbrella insurance also provides coverage for claims like false arrest, libel, slander, malicious prosecution, and mental anguish that may be excluded by other liability insurance policies—such as homeowners insurance, automobile insurance, and watercraft (boat) insurance.

What Does Umbrella Insurance Cover?

Umbrella insurance provides coverage beyond the limits of your other liability insurance policies, or for claims that may not be covered by your other liability policies. Umbrella insurance generally provides liability coverage for:

• Personal injuries you or members of your household are alleged to have caused others

• Property damage you or members of your household are alleged to have done

• Defending lawsuits involving covered claims

• Landlord liability to tenants and their guests (slip and fall accidents, dog bites)

• Personal liability for false arrest, libel, slander, malicious prosecution, and mental anguish

What Does Umbrella Insurance Usually Not Cover?

An umbrella policy generally does not provide coverage for:

• your injuries or damage to your personal property

• a criminal or intentional act causing injury or damage to someone else

• liability you assume under a contract

• losses related to the operation of your business or damage to your business property

In North Carolina, umbrella insurance serves as an additional layer of liability protection that kicks in when the limits of your standard insurance policies, such as homeowners, auto, and watercraft insurance, are reached. It covers a broad range of potential liabilities, including personal injury, property damage, and certain legal situations such as libel, slander, and false arrest that you or members of your household may cause to others. It also covers legal defense costs in the event of a lawsuit for covered claims. However, it's important to note that umbrella insurance does not cover personal injuries to the policyholder, damage to the policyholder's personal property, intentional criminal acts, liabilities under contracts, or business-related liabilities. The specific terms and coverage of umbrella insurance policies can vary, so it's advisable to consult with an attorney to understand the full scope of coverage and any exclusions that may apply.