Personal Umbrella Liability Insurance

What Is Umbrella Insurance?

Just as an umbrella shields you from rain in a storm, a personal umbrella liability policy protects you from a downpour - that worst-case scenario where you could lose everything in a lawsuit. Even if your assets are few, umbrella insurance also protects your income; in some settlements, wages can be garnished for up to 10 years.

In addition to extending the limits of your automobile, homeowners, renters and watercraft policies, umbrella liability insurance also covers personal injury claims, including false arrest, libel and wrongful eviction, typically excluded by those policies.

Who Needs Umbrella Insurance?

You do! Contrary to popular belief, umbrella liability policies are not just for the wealthy. We recommend that everyone should at least consider carrying an umbrella policy. You'll have peace of mind knowing that you are covered in case of a fluke occurrence. If you engage in a high-risk activity or hobby that increases your odds of getting sued, it is wise to supplement your insurance with a personal umbrella liability policy.

Higher risk activities or situations could include:

  • Having a teenage driver or a driver over 70
  • Hired help
  • Owning a swimming pool
  • Entertaining frequently
  • Stream of visitors to your home
  • Pets, especially dogs that bite
  • Operate a business in your home
  • Social media or blogging with negative opinions against others
  • Children who bully or cyberbully
  • High Risk Professions - celebrity, public figure, athlete, professional entertainer, etc.
  • High Risk Hobbies - skydiving, race-car driving, bungee jumping, scuba diving, parachuting, etc.

Coverages: How much do you need?

You want to take into consideration not only your personal assets but also your potential personal risks. Determine your personal risks to evaluate the amount of additional liability coverage that makes the most sense for you. Coverages start at $1 million and can go as high as $10 million.

Umbrella insurance companies generally have minimum requirements of how much liability coverage you MUST have on your primary automobile or homeowners policy. Most companies require you to have $300,000 liability coverage on any homes and automobile bodily injury coverage that is either $100,000/$300,000 split limits or $300,000 combined single limit. Anything less, the umbrella company will require you to raise your limits before they offer you the coverage.

Some Umbrella companies offer extended coverage for uninsured/underinsured motorists' coverage, which will offer you even more protection for yourself should you get injured and the other driver has minimal coverage.

Coverages: How much does it cost?

Additional liability insurance is inexpensive when compared to the added coverage you gain. Depending on the policy value and your personal risk factors, such as recent auto tickets, your credit rating and more, a $1 million umbrella typically costs less than $300 annually. Premiums go up an additional $50 to $75 for each million thereafter. Discounts are generally available as well when you purchase an umbrella policy with the same company as your auto or home.

But why do I need all this coverage?

Accidents happen - and it's not uncommon for jury awards and out of court settlements to run into millions of dollars. While it's difficult to pinpoint the monetary consequences of the risks you and your family take each day, are you certain your current liability insurance offers you enough protection?

If you are found to be legally responsible for injuring someone or damaging their property, without a personal umbrella policy, anything beyond the limits of your standard liability insurance coverage will come out of your own pocket. If you had a policy, the insurance company assumes the risk, not you.

Not only do they cover the judgements in a lawsuit, but in most cases, they will provide you with legal defense. If the company provides the legal defense, the cost will not be deducted from your liability limit. It's almost like you have a personal lawyer on retainer!

Examples of When An Umbrella Policy Can Help You:

  • You have an automobile accident involving drivers with injuries.
  • Your dog bites someone in your community.
  • Your child injures another child in a fight at school.
  • A handyman injures himself while in your home.
  • Your teenager runs a stop sign, causing an accident.
  • A deliveryman falls on your sidewalk and is seriously injured.
  • A child falls into your pool and drowns.
  • A neighbor walking up to your home slips on ice.
  • A babysitter is injured by your otherwise friendly dog.
  • A visitor in your home trips on your stairs, injuring themselves.
  • A can of paint falls from your roof and ruins your neighbor's exotic flower garden.
  • Your car skids on an icy road and smashes into the neighbor's garage.
  • A burglar breaks into your home through a window, injuring themselves.
  • You are on a ski vacation and you injure someone else on the slopes.
  • You are falsely arrested/imprisoned.
  • You write a bad review for a restaurant and they claim defamation.
  • Your child spreads photos and rumors of a peer online with the intention of humiliation or defamation.

A Case Study: Distracted Driving

After a hectic work week, Jim Marshall was looking forward to a relaxing weekend with his wife and kids. He was just a few blocks from home when his cellphone rang. He glanced down to see who was calling. That split-second distraction was all it took for him to miss the approaching stop sign.

Jim plowed into the side of a passing car. The accident resulted in serious injuries to the driver and passenger of the other vehicle. Jim was sued, found at fault and ordered to pay $1 million for medical expenses, lost wages and the "pain and suffering" of the injured parties.

Although he had auto insurance, that policy had a limit of $300,000. That meant that unless Jim had another way to pay the remaining $700,000, his assets (retirement savings and college funds for his teenage sons) were at risk of being garnished. Fortunately, Jim was able to keep his assets because he had a personal umbrella liability insurance policy to cover the remaining balance.

Why Wait?

Don't wait for a rainy day to find out you need the additional protection a personal umbrella liability policy can provide. Contact us today to discuss your unique needs and we will be happy to provide you with an accurate quote.