Personal Umbrella Insurance in Canada

Whether it’s through the news, word of mouth or your social media feed, it’s not uncommon to hear about a company or an individual getting sued for over a million dollars these days. Accidents and mistakes have always been a part of life; they’re inevitable and unavoidable. But as a society, we have become more litigious and for higher quantities in the past few years. Because of this new shift, more and more people are adding personal umbrella insurance to their coverage in Canada. Everyone is liable and owning a car, home, boat or even a dog can increase your chances of liability. We break down what, why and how of personal umbrella insurance:

What is Personal Umbrella Insurance in Canada?

A good way to visualize personal umbrella insurance is like carrying an external battery pack for your phone. You don’t want to have to use it and hopefully, your phone won’t die while you’re out and about. But if it does and you’re lost in a new city or stuck on a long flight, you’ll be more than relieved that you have a way to get an extra charge. Personal umbrella insurance is similar; it provides an extra safety net and additional coverage when your other policies run out. 

An umbrella policy provides two extra areas of liability coverage in the case of a lawsuit or claim: 

  1. If your other policies, such as your home, boat, auto etc insurance, won’t cover it at all. For example, libel, slander, vandalism, and invasion of privacy are not covered in the typical property insurance policy. 
  2. It’s covered but it exceeds the limits of your insurance policies. For example, most drivers have auto insurance with a $1 million dollar limit. But if you get in an accident and injure another driver who sues you for $1.6 million dollars, a personal umbrella policy can cover the $600,000 your auto insurance policy could not cover. Otherwise, you’re stuck trying to cover the costs from your own wallet. 

Why Do I Need It? 

You may be thinking that you don’t need this coverage because you’re not accident prone or at risk of being liable for a lawsuit. But that’s not necessarily the case; everyone open to the risk of being sued – even if it might not be your fault. You may be a safe driver but have you ever considered the risk of your dog accidentally hurting someone or the chances of someone getting hurt in your backyard pool? Freak accidents are self-explanatory; you never saw it coming or expected it to happen. With personal umbrella insurance though, you can be prepared before it happens. 

Are you an entrepreneur or business owner? Find out why do you need business insurance too.

How Much Does It Cost?

Like any other changes or special coverages, everyone’s policy and provider is different; you should consult your broker to see how much a personal umbrella policy would cost. However, they are usually reasonably priced and lower than people expect them to cost. 

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