Personal Umbrella Insurance Coverage Ontario

Ontario Personal Umbrella Insurance

Think of how useful an umbrella can be. It protects you from the rain in stormy weather by offering better coverage over and above your raincoat and hat. Regarding umbrella insurance, Ontario residents can benefit similarly because it provides an extra layer of protection with liability coverage above what your car and home insurance policy provides. An Ontario umbrella insurance policy will offer broader coverage for additional exposures than what the underlying policy—your home insurance or auto insurance policy—may provide.  

What is Umbrella Insurance?  

Also known as excess liability insurance or blanket insurance, a personal umbrella insurance policy is a type of personal insurance that fills in the gaps that your other insurance policies (such as home, auto or boating) leave behind. It provides extra liability insurance on any additional risks you might identify. Consequently, you are protected on all fronts. Ontario policyholders, this coverage is an important part of your complete protection strategy.  

For example, imagine your dog getting loose from your backyard and biting your neighbour. A situation like that would typically be covered under your home insurance policy, but if your neighbour sues you to cover the cost of their medical bills and additional compensation for pain and suffering, the settlement and legal fees combined could far exceed the coverage limits on your home insurance. Once your home insurance policy reaches its limit, your umbrella insurance coverage will kick in to pay the rest of the costs up to your umbrella insurance policy limit.  

Why is an Umbrella Insurance Policy Needed?  

Many situations that call for your insurance company to provide funds for repair or replacement, like a fender bender or hail damage to your house from a storm, can be handled under your basic auto or home insurance. Liability issues are different. If you are sued because you allegedly caused bodily injury or property damage—even if the charge was groundless, false or fraudulent—you will be forced to defend yourself in a court of law. The costs for a robust legal defence alone can be financially devastating, and that’s not even including settlement costs for medical bills, property damage restoration and more should the other party be successful in their lawsuit against you.  

In all likelihood, the legal defence fees and settlement expenses in scenarios where you’re liable for bodily injury or property damage would exceed the limits of your standard insurance policy. Without the additional financial safety net, Ontario residents are responsible for paying out of pocket for any expenses that go over and above those insurance liability limits, which could cause severe financial loss that takes years or decades to recover from. Umbrella liability insurance is a simple way to give you the additional coverage you need to avoid a catastrophe that could set you back for a long time.  

Who Needs Personal Umbrella Insurance in Ontario?  

You likely have several insurance policies to protect your home, your car and various other belongings. However, policies do not often cover every possible risk and might leave you paying huge expenses out of pocket if you don’t have umbrella insurance. Ontario insurance providers offer this type of policy in addition to helping alleviate the financial burden of expenses like legal fees in the event that you are sued or cover liabilities that exceed the limit of your other policies. If you do not want to leave any such risk up to chance, umbrella liability insurance is for you.  

Everyone has some level of vulnerability to liability risks. There’s simply no way to prevent every accident or error in judgement that could lead to someone bringing legal action against you for causing some type of harm—not to mention the fact that you could be accused of something you truly weren’t responsible for and be forced to hire legal representation to defend you in court. That’s why absolutely everyone should at least consider investing in umbrella insurance. Ontario residents should know that the cost of umbrella insurance is very affordable, but the peace of mind it offers you is absolutely priceless.  

That being said, some people have greater exposure to liability risks than others. Someone who owns their own business, coaches their child’s soccer team, volunteers for non-profit organizations and is, in general, very active in their community is more at risk of encountering a situation that could trigger a lawsuit than a dedicated homebody who rarely leaves their house and doesn’t enjoy interacting with others. Here are some activities or scenarios that could expose you to increased liability risk:  

• You’re a frequent traveller  
• You own recreational vehicles or equipment such as a skidoo or jet ski  
• There’s a pond, swimming pool or trampoline on your property  
• You volunteer for school field trips  
• You frequently host parties and other events  
• You have teenage drivers in your household  
• You coach children in sports or other activities  
• You serve on a board of directors  
• You rent out property on a short or long-term basis  
• You are responsible for managing a family trust  
• You employ staff members for your household  
• You own horses, livestock, large dogs or other animals with the potential to cause injury  

You can’t avoid your interests and responsibilities just because you’re worried that you might be sued, which is what makes it so critical to have the right umbrella insurance. Ontario policyholders with additional liability coverage can get out there and enjoy life without fear of financial loss.  

What Does Personal Umbrella Insurance Cover?  

An umbrella policy is an additional layer of liability insurance over your home, car, motorcycle, cottage, watercraft and snowmobile policies. Umbrella policies broaden the definition of your primary policy with additional liability coverage that gives you added safety against loss.  

However, it’s important to note that personal umbrella insurance doesn’t just extend the limits of coverage you already have from your home and auto insurance. Your personal umbrella insurance policy may also cover certain risks from the first dollar of loss or liability incurred, which are not covered under your primary policies. The umbrella insurance policy is said to “drop-down” to cover them as primary insurance and fill in the gaps in the underlying policies. That includes financial protection if you are sued for:  

• Defamation of character, slander and libel  
• Mental anguish  
• Malicious prosecution  
• Imprisonment, illegal detention or false arrest  
• Wrongful eviction  
• Invasion of privacy  

In addition, your personal umbrella insurance may include extra coverage, such as compensation for your loss of income if you are sued and need to take time off work to prepare and execute your legal defence strategy.  

Does Umbrella Insurance Cover Legal Costs If the Defendant is Found Not Responsible?  

If you are sued and the court finds you not responsible for a damaging or dangerous incident, your lawyer still has to be paid. With umbrella insurance, Ontario policyholders will still receive insurance compensation for attorney fees, even if the lawsuit brought against them was groundless, false or fraudulent.  

Can Umbrella Insurance Be Used Instead of Home or Auto Insurance?  

In short, no, it can’t. You must file a claim on your base home or auto insurance policy and completely exhaust that policy’s liability coverage before you can file a claim on your umbrella insurance. Ontario insurance companies will reject your umbrella insurance claim if you haven’t first used up all the liability coverage on the underlying policy, whether it’s home insurance, auto insurance, tenant insurance or another type of personal insurance coverage.  

Personal umbrella insurance is designed to be used as an additional layer of protection against liability-related expenses only when the primary insurance has reached its coverage limit. One of the main reasons why your primary coverage must be completely exhausted before you can access your personal umbrella insurance is that your insurance provider partially determined the cost of your umbrella insurance premiums based on the amount of coverage you already had on your primary insurance policy and the likelihood that you would be subjected to litigation expenses that could exceed your primary coverage amount.  

What are Some Situations That Could Lead to an Umbrella Insurance Claim?  

With the right umbrella insurance, Ontario residents can get additional financial protection for coverage that would first come out of auto insurance or homeowners insurance. But there are also a few types of coverage that are exclusive to your umbrella insurance. Ontario policyholders, here are a few examples of various situations that could cause you to need umbrella liability insurance:  

• You make a big batch of cupcakes for your child’s school bake sale and are sued by parents when several children get food poisoning from your contribution.  
• Your spouse writes a series of negative reviews about a restaurant, claiming to have seen signs of a rodent infestation and unsavoury kitchen practices. The restaurant could choose to sue to prove the reviews wrong and salvage its reputation in the community.  
• Your teenager goes to a house party and indulges in alcohol, then decides to spray a can of fire retardant powder all over the living room—even though nothing’s on fire. The house’s owners sue you for clean-up and property damage restitution.  
• Your kindergartener pushes another kid off the monkey bars at school. That child sustains facial injuries that require cosmetic surgery, prompting their parents to sue you for the cost of restorative surgery.  

As you can see from the above examples, a personal umbrella insurance policy doesn’t just protect you. It protects all the members of your household who are included in your homeowner’s insurance policy, so you can rest easy knowing you won’t suffer major losses if a lawsuit is brought against you.  

What Does Umbrella Insurance Cover That Is Not Covered By Other Policies?  

While adding liability coverage to an existing policy is the main purpose of umbrella insurance, Ontario policyholders should note that personal umbrella insurance can actually give them some coverage for situations that do not fall under their primary policy. What exactly that coverage is depends mainly on your insurance company and how your policy is written, so if you’re not sure precisely what is covered, the best course of action is to speak with your broker at Morison Insurance and make sure you have the coverage you need for the scenarios that you are most likely to encounter.  

That being said, here are some of the perils that could lead to a lawsuit against you and are potentially covered exclusively by your umbrella insurance in Ontario:  

• Invasion of privacy  
• Malicious prosecution  
• False arrest, detention or imprisonment  
• Wrongful entry or eviction  

What is Not Covered by Ontario Umbrella Insurance?  

When considering what’s not covered by umbrella insurance, Ontario policyholders should remember that it is specifically liability coverage. That means it covers you in situations where you are allegedly liable for injury, property damage or personal harm to another person. It does not cover your expenses should you be the one who is hurt or if your property sustains damage. Umbrella insurance does not cover:  

• Criminal acts committed by the policyholder  
• Repair or replacement for your personal belongings  
• Medical expenses if you are injured  
• Commercial losses associated with your business (that falls under business insurance coverage)  
• Liability you assumed in written or oral contracts  
• Damage that was caused on purpose by you or a member of your household  
• Liability issues that arise from war, terrorism and armed conflicts  

Does Personal Umbrella Insurance Apply When Travelling Outside Ontario?  

Yes, it does. That’s actually one of the big advantages of umbrella insurance. Ontario residents who encounter a situation where they are liable for injury or property damage while out of province or out of the country can rely on their personal umbrella insurance to provide worldwide protection against the costs associated with legal defence and legal settlements. It offers the same level of protection regardless of where you are in the world when the incident occurs or where you are when someone accuses you of being liable for injury or damage.  

Can Umbrella Insurance Be Added to a Tenant Insurance Policy?  

If you rent your home rather than owning it, you likely already know how important it is to have the right tenant or renters insurance policy in place so you can get the insurance compensation necessary to replace your belongings if they are damaged, destroyed or stolen. However, your tenant insurance also includes personal liability coverage that is the same or similar to what you would expect to get with a typical home insurance policy. Just like liability coverage on home insurance, the personal liability coverage limits on your tenant insurance are likely not sufficient to get you compensation for the total cost of your legal defence and settlements should you have legal action brought against you in court.  

Not only is it possible to enhance tenant insurance with the addition of umbrella insurance, but Ontario renters are highly encouraged to do so. Most of the same personal liability issues that could befall a homeowner are just as applicable to a renter, so it stands to reason that a renter needs additional liability protection as well.  

Can Umbrella Insurance Be Added to a Condo Insurance Policy?  

Just like with tenants, it’s important for a condo owner to have adequate liability coverage from the right personal umbrella insurance. Ontario condo owners may need it even more than other types of homeowners in some cases because a condo owner shares a building or building complex with numerous other homeowners, and that means they have a greater level of exposure to situations that could result in a lawsuit. If you have a condo insurance policy and you’re concerned that your liability coverage limits aren’t sufficient to address your level of liability risk, give your experienced Morison Insurance broker a call and speak with them about adding umbrella insurance to your condo insurance policy. 

Are Blanket Insurance and Umbrella Insurance the Same Thing?  

These two types of coverage are often confused with each other, likely because the names suggest a similar type of insurance that “covers” gaps in your existing coverage limits. While that is the case, these two coverages are not the same, and the main difference lies in the fact that umbrella insurance is additional coverage for liability while blanket insurance is additional coverage for property insurance.  

If you are sued and your legal expenses exceed the coverage limits on your underlying policy, you can file a claim on your umbrella insurance. Ontario homeowners who suffer a property loss, on the other hand, may find that the cost of restoring their damaged property or replacing lost, stolen or destroyed items exceeds the property insurance coverage limits on their underlying policy. In that case, you could file a claim on your blanket insurance policy to get additional compensation to deal with expenses related to your property loss.

Is Umbrella Insurance Necessary for People Who Don’t Have a High Income?  

While there’s a common misconception that only high-income earners need umbrella insurance, Ontario residents should be aware this is not the case. It may seem like you’re unlikely to be sued if you fall into a lower income bracket because anyone potentially thinking of litigating against you would know you don’t have the funds available to pay out a large settlement. It’s important to understand that is not how legal settlements work. If you are found liable in court and a settlement is awarded to the plaintiff, but you don’t have the insurance coverage necessary to pay it, you will be subjected to solutions such as wage garnishment that will result in significant financial setbacks for you.  

Bringing in a relatively low income does not in any way protect you from being sued and being found liable, so it’s just as crucial for low-income earners to have sufficient liability coverage limits to address those risks as it is for high-income earners. Keep in mind that you can still have legal action brought against you even if you didn’t make any mistakes or do anything wrong, and even if you are found not liable for the allegations against you, you’ll still need to pay expenses such as attorney fees and court fees. With umbrella insurance, Ontario residents can make sure they have the coverage necessary for any unexpected litigation costs.  

Is It Possible to Get Home or Auto Insurance and Umbrella Insurance From Different Insurance Companies?  

Ontario insurance carriers do generally require you to buy your umbrella coverage from the same company that provides your underlying policy, whether it’s for home insurance, auto insurance or something else. That means if you currently have your primary policy with an insurance company that doesn’t offer umbrella insurance, Ontario brokers may advise you to switch your primary policy to a different insurance provider. Speak with your broker at Morison Insurance to find out more about the best course of action in your particular situation.  

How Much Does Umbrella Insurance Coverage Cost?  

An umbrella insurance policy is typically inexpensive and may cost as little as $100 to $267 per year, which makes it a highly cost-effective way to protect yourself from paying expenses for liability claims out of your own pocket. A personal umbrella liability insurance policy is part of a complete protection strategy to provide you with peace of mind.  

Your insurance carrier will assess a number of factors when determining your umbrella insurance quote. Ontario insurance companies evaluate information such as:  

• Your current insurance coverage  
• Past claims history  
• Your net worth  
• Your home location  
• Your career  
• Other activities that could be possible risk factors  

Another important factor will be how much coverage you need to ensure your liability coverage is adequate to protect you. Umbrella insurance policy coverage limits typically start at one million and go up in 1-million-dollar increments to five million. However, two million is the recommended minimum for most people.  

It’s also worth noting that the limits on your standard home or auto policy will come into play as well because some companies will only offer umbrella insurance with an equal or higher limit than the original policy. For example, if the coverage limit on your car insurance is two million, your umbrella insurance limit would need to be at least two million. Be sure to speak with a Morison Insurance broker who can review your policy and start an umbrella insurance quote.  

Is It More Cost-Effective to Increase Liability Coverage on a Primary Policy or to Add Umbrella Insurance?  

Which option is the most cost-effective depends on a few factors, like the current amount of liability coverage on your primary policy. There may be some cases where adding an endorsement to your existing primary policy is less costly than getting a personal umbrella insurance policy, but typically, the endorsement won’t offer you as much coverage as you could get from umbrella insurance, so while it may not cost as much, that doesn’t necessarily mean it provides the best value. One of the big benefits of working with a qualified insurance broker is that we’ll go through the various options for coverage with you and help you choose the one that makes the most sense for your insurance needs.  

Where Can I Get An Umbrella Insurance Quote?  

If you are looking for the extra layer of coverage, contact us at Morison Insurance and they can start an umbrella insurance quote. Our insurance professionals will provide you with a quote and make sure you are properly covered. Get started today by calling 1-800-463-8074, or by filling out the form on our website.