So What Does a Personal Umbrella Policy Really Cover?

No matter where you live, what you do, or who you are, everyone is at risk for liability exposure. Accidents happen, and as accidental as those incidents may be, they can still leave you exposed and vulnerable.

We know what you’re thinking: this is just another grab from the insurance companies trying to squeeze more money out of you. You are welcome to have those thoughts and feel any way you like but, the fact of the matter is, if a liability claim is taken out against you and you don’t have sufficient coverage, you’ll be losing a lot more money than the average cost of an Umbrella Policy. The financial havoc a liability claim can cause doesn’t just stop with your savings account. Other assets can be at risk as well such as future wages, 401k, real estate holdings, pension, and vehicles.

Let’s give a few examples to put it in perspective for you:

Example #1:

A 17-year-old driver collided head-on with another vehicle, killing two people and seriously injuring another. The court found the teen negligent and ordered him to pay $1.5 million. His parents’ Auto policy had a $300,000 liability limit, but they also carried a $2 million Personal Umbrella that covered the remaining costs.

Example #2:

A three-year-old girl was attacked by her grandmother’s dog. She lost vision in her eye and received permanent scarring. The out-of-court settlement was $750,000.

Example #3:

A local homeowner owed a $700,000 settlement when a 30-year-old man suffered permanent vocal cord paralysis after crashing an all-terrain vehicle (ATV) on the resident’s property.

These everyday examples could happen to any one of us in the blink of an eye.

So, let’s get down to the details: what is actually covered by an Umbrella Policy? Well, you get higher liability limits as well as additional coverages which your existing policies may not cover. If your underlying Home, Auto, or Watercraft policy’s liability limit has been reached, an Umbrella Policy can take effect and make up the difference in total or in part depending on your Umbrella limits. Umbrella Policies can also offer coverage for attorney fees associated with claims that are not covered by your underlying policy.

Take this blog for what it is, just some general advice from your local insurance company on how to better protect yourself and the things you work so hard for. An Umbrella Policy may seem like it can only be helpful in extreme situations but unfortunately extreme situations tend to happen when we least expect them.

Disclaimer: This is a general interpretation of processes and coverage. All claims are subject to Insuring Agreements, Endorsements, Exclusions, Terms, and Conditions of the Policy.

Have any questions about what you just read? Please contact your Independent Insurance Agent or email us at socialmedia@psmic.com!