Why You Need a Personal Umbrella Policy




Consider the following scenarios:
  • You are hosting a holiday party at your house. The floor is wet from guests tracking snow in from outside.  One of the guests slips and falls and hits his head hard on the floor.  His recovery includes a long hospital stay and months of rehab.  He is out of work for six months.  The total amount of the claim is $1,250,000.  Without an umbrella policy, amounts in excess of the personal liability limit of your homeowner’s policy are paid out of pocket.
  • Your newly licensed teenager is driving home from her nighttime job. She swerves to avoid hitting an animal in the middle of the road but instead hits an oncoming car with five passengers.  All sustain injuries.  Medical costs and loss of wages are well over $1,000,000.  Without an umbrella policy, amounts in excess of the bodily injury limits of your auto policy are paid out of pocket.
  • Your son invites a friend over for an after school play date. The children are playing with your family dog who bites your son’s friend in the face.  The injury results in many reconstructive surgeries and permanent scarring.  The injured child’s parents settle for $1,750,000.  Without an umbrella policy, amounts in excess of the personal liability limit of your homeowner’s policy are paid out of pocket.
Consider the following activities which create lawsuits everyday:
  • Owning a dog – there are over 5 million dog bites annually
  • Owning rental or vacation properties
  • Driving a car – there are over 6 million car collisions annually or one every 10 seconds
  • Volunteering
  • Being financially responsible for children
  • Owning a boat
  • Chaperoning on a class trip
  • Hosting parties at your house
  • Regularly posting reviews online
  • Participating in sports
  • Having a swimming pool on your property
What is a Personal Umbrella Policy?

A personal umbrella policy can be thought of as an added layer of protection against claims and lawsuits that exceed the liability limits provided by your homeowners, automobile, renters and watercraft policies.  If a claim against you exceeds the limits of these “underlying policies” and you don’t have a personal umbrella policy, you could end up paying out of pocket.

An umbrella policy pays for settlements AND defense costs.  Anyone can sue for any reason.  If you are the victim of a frivolous lawsuit, the cost to defend yourself could be astronomical.  With an umbrella policy, your insurance company will provide, and pay for, defense even if the suit is fraudulent or groundless.

It’s important to note that a personal umbrella policy does not cover business activities.  A commercial umbrella policy is designed to cover business activities.

Why should you purchase a Personal Umbrella Policy?

What would happen if you faced a major lawsuit?  What if you or a family member was found at fault, or was negligent for someone else’s injury or damage?  Anyone who wants to protect their financial future and the financial future of their family should think about umbrella coverage.  A personal umbrella policy can help protect not only your current assets but your future earnings.  If your assets and future earnings are greater than your underlying liability limits, you should consider purchasing an umbrella policy.

How much does a Personal Umbrella Policy Cost?

Umbrella coverage is relatively inexpensive.   The average cost of a $1,000,000 umbrella for an individual or family who owns a home and two automobiles is around $200 a year.  Think of this as the cost of a nice dinner, a shopping spree or one month’s cable bill.

Consider purchasing the highest limits you can afford.  It’s an affordable way to increase your personal liability protection and give you piece of mind knowing your family and your assets are protected.

If you would like more information or are interested in receiving a quote, please give us a call or click here:  https://ghdunninsurance.com/get-a-quote-form-page/.

This material is for information purposes only.  All statements herein are subject to the provisions, exclusions and conditions of the applicable policy.  For an actual description of coverage, terms and conditions, please refer to the applicable insurance policy or check with your insurance professional.