Do I Need a Personal Umbrella Policy?
Maybe you just bought your first house, had your first child or had some other life-changing event. Then you start to worry, “Do I have enough insurance?” Adulting is hard and paying for insurance that you may never need can be harder. However, a personal umbrella policy buys peace of mind at a very affordable price.
What is a Personal Umbrella Policy?
A Personal Umbrella Policy is an excess liability policy that sits above your underlying coverage such as your personal auto and homeowners liability coverage. It will kick in if your underlying coverage is exhausted. An example would be an at fault accident that you are involved in and sued for bodily injury, property damage and other compensatory damages.
Why is a Personal Umbrella Policy a good idea?
We recommend most homeowners or households consider an umbrella for a few reasons. Medical costs continue to rise, so if you cause an auto accident you might quickly go through your auto liability limits. Auto repairs are also on the rise, so if you cause serious property damage in an accident you might also go through your auto liability limits quickly. Another reason is that an umbrella will protect your family for personal injuries such as libel and slander. An umbrella will also protect you for personal activities such as accidentally hitting someone with a golf ball causing serious bodily injury. If you do international travel your umbrella will extend to auto liability for rented vehicles overseas whereas your personal auto policy will not (please check your particular policies for specifics).
How much does a Personal Umbrella Policy cost?
The good news is that umbrellas are relatively affordable for the amount of coverage and peace of mind that they provide. For example, a household with one home and two vehicles might pay $300 per year per million in coverage. Premium will likely be more with teenage drivers, but this is another very good reason to have an umbrella. There may be additional costs involves… One of the requirements to purchasing an umbrella is that your underlying home and auto liability policies have minimum limits of typically $300,000. This might mean you will have to increase your limits just to qualify which will add an additional premium.
Personal Umbrella Policies are worth looking into and worth purchasing to protect your family and assets. As more buyers go to direct insurance writers online, there can be a lack of education on this topic leaving property owners and those with assets at risk. If you have questions about your personal liability exposures or a Personal Umbrella Policy, please contact us. Our goal is to help families and businesses understand their insurance and find the best solution that fits their needs.