Our Blog

As part of our blog series on the importance of reviewing your insurance policies, we’re wondering, are there gaps in your coverage?  Have you thought about personal umbrella insurance?

What if you rear-end a high-powered surgeon and they can’t return to work because of their injuries? You don’t have to be a millionaire to be sued like one!  Accidents happen, and if you’re found at fault by the court, it could wipe you out financially. You can protect yourself from the unexpected with a supplemental insurance policy, known as umbrella or excess personal liability insurance coverage.  A Personal Umbrella Policy (PUP) is extra security above and beyond the normal or primary liability limits of your personal auto, homeowners, boat, motorcycle, renters or condominium insurance. And the good news is, it’s relatively inexpensive! 

What is Personal Liability Coverage and Why is it important?

A personal liability insurance policy protects an individual from the risk that they may be sued and held responsible for injuries and damages caused to others. These policies cover both legal costs and any legal payouts for which the insured would be responsible if found legally liable. However, the legal payouts are only up to the primary liability policy limits. Without this coverage, individuals would be forced to pay out of pocket for any damages and legal fees.

Why You Should Consider a Personal Umbrella Policy (PUP)

If you’re sued for more than the primary liability amount covered on your personal home, auto or boat policy, you could be personally responsible for the amount that exceeds your primary liability limit.  A personal umbrella policy is a second layer of liability coverage that sits on top of the primary liability coverages offered by your personal policies. 

Who & What can personal umbrella insurance cover?

• The named insured and all resident relatives
• The costs of legal payouts against you when a covered lawsuit exceeds your primary (also known as underlying) liability insurance limits 
• Primary policy coverage gaps, including personal injury liability protection situations such as false arrest, wrongful entry, defamation, humiliation, libel, slander, invasion of privacy
• In court proceedings, an attorney can be hired and retained for you. Their fees are typically covered outside policy limits

Who needs a PUP?

Many of us do. Quite simply, we live in a lawsuit-happy world. If you have assets and you're ever found at fault in a serious automobile accident or sued for a personal accident on or away from your property, you’ll want all the coverage you can get. That's why a personal umbrella policy makes sense for so many drivers and homeowners. It’s affordable supplemental insurance that’s there when your primary insurance hits its limit. That can make a world of difference for expensive lawsuits.

How big a PUP do you need, and what are coverage amount rules of thumb for a PUP?

Coverage limits on a personal umbrella policy start at $1 million and increase by million-dollar increments for qualified applicants.  But remember, when considering a PUP, your assets go beyond your banking or investment accounts. It’s also your home, earnings and valuables.

What's the average cost of a PUP?

You may think personal umbrella insurance is expensive, but it’s actually a very affordable level of coverage. Depending on the state you live in, for about $1 a day, you can have the additional protection of a PUP that works with your existing personal liability insurance coverage.

Does a PUP apply anywhere in the world?

Yes.  Your personal umbrella insurance coverage goes with you wherever you go – in the U.S. and around the world.

What happens if the minimum underlying limits on primary personal policies are not met?

You’ll lose out on a personal umbrella policy. All insurance companies that sell personal umbrella insurance require you to have certain minimum amounts of primary liability insurance before the umbrella policy can be written. 

Still not sure you need a personal umbrella policy?  You can learn much more about why you should consider purchasing one by contacting a professional insurance agent. Just consider the gaps that may exist in your primary personal liability insurance coverage and the potential for unexpected accidents or circumstances.  That alone should help with your decision.

Stay tuned as we continue our blog series on insurance reviews. As always, we welcome your questions and suggestions on the insurance issues that matter to you most.