Umbrella Insurance: Coverage, Claim & Exclusions

Updated: 26-10-2022 13:06:41 PM

It might happen that the coverage amount offered by an insurance policy for a third party liability, be it a home or car insurance, gets exhausted without fulfilling the requirement. In such a situation, a policyholder can get an umbrella insurance for extra coverage.

What is Umbrella Insurance?

An umbrella insurance, also known as extra liability insurance, is designed to provide extra protection to an individual from any legal or other liabilities, in case the limit of the primary policy gets exhausted. It helps the policyholder in protecting his/her future and assets.

For instance, if you are covered under this policy and the liability insurance or third party coverage for your car insurance gets used up; umbrella insurance comes to the rescue. It provides you coverage beyond the limits of your policy.

What all Umbrella Insurance Covers?

It offers the following coverage:

• Covers legal liability of the insured arising out of bodily injury of a third party
• Offers protection against any damage caused to the properties or assets
• Provides coverage for certain types of lawsuits and legal procedures
• Covers liability protection against libel which means protection against the harmful written statement
• It provides protection against false imprisonment or detention

Umbrella Insurance Claim Process

• The policyholder needs to immediately provide a written notice to the insurance company about the incident
• One can also report the incident by calling on their customer care toll-free number
• Also, provide details like time and date of the incident, nature of loss, etc.
• Provide all relevant documents as requested by the insurance executive to evaluate the case
• Compensation will be payable as per the compensation payment terms mentioned in the policy wording
• On the completion of the assessment, the claim will be settled, if found satisfactory

Documents Required for Claim Process

Following are some of the documents needed to file a claim under an umbrella insurance:

• Duly filled in claim form
• Policy documents
• FIR, if applicable
• Details of the damaged property

Time Taken to Settle Claims

Claims related to umbrella insurance get settled within 30 days from the date of receipt of the documents. However, the duration can extend if any investigation is required or the documentation is incomplete.

Exclusions under Umbrella Insurance

Claims are not entertained under situations. These are called exclusions. Below are the general exclusions under this policy:

• Any loss or damage caused due to war and related perils
• Any consequential loss, damage proven to have occurred due to the failure of one party to meet contractual obligations
• Any loss caused due to radioactivity or nuclear weapons
• Any loss due to depreciation or wear and tear

Companies offering Umbrella Insurance in India

Currently, Tata AIG General Insurance is the only insurance company to offer Umbrella Insurance in India.

Important Aspects

Below are some of the important points that need to be considered before buying umbrella insurance:

• Exclusions of the policy
• Eligibility criteria
• Claim Settlement Ratio of the insurance company
• Coverage of the plan

Advantages of Umbrella Insurance

• Covers you against unforeseen circumstances which are usually not covered by any standard insurance policy
• Comes with number of rider options that a policyholder can choose from for a comprehensive coverage
• As this policy gives extra liability coverage to the insured, it ensures peace of mind and makes them feel additionally secure

FAQs

Q1. Why it is advisable to take Umbrella Insurance?

Umbrella insurance provides protection beyond the limits of the normal liability coverage. It gives additional protection.

Q2. What are the extra rider options available under umbrella policy?

The types of cover options offered under umbrella insurance are as follows:

• Protection against bodily injury liability
• Property damage liability
• Owners of rental units, personal liability, etc.

Q3. What cover options are offered by this policy?

There are five cover options which a policy seeker can choose from:

• Fire and allied perils
• Burglary
• Electronic equipment and other domestic appliances
• Loss of cash due to assault
• Personal accident

Q4. How can one cancel this insurance policy?

In case, an individual is not satisfied with the policy terms and conditions, s/he can cancel the policy within 15 days from the receipt of the policy documents. Additionally, one should not have made any claim during the policy period.