Personal Umbrella Insurance

By Evelyn Galiano

man holding hands over family cutout

Personal Umbrella Insurance is an insurance policy you purchase that provides additional liability coverage above the liability coverage that is listed on your auto, homeowners/renters/dwelling, and boat insurance policies.

You may be asking yourself “Why would I need an Umbrella Insurance Policy if my current policies offer liability coverage”? We are going to break down the coverage for you today and list the reasons we always suggest purchasing a Personal Umbrella Insurance policy.

What is a Personal Umbrella Insurance Policy?

Personal Umbrella Insurance provides an additional amount of Liability Coverage over and above what your current Auto/Home/Boat insurance policies provide. Personal Umbrella policies do not provide coverage for contents, dwelling or auto itself, it provides only liability coverage. Personal Umbrella policies provide additional coverage for injuries, lawsuits, and personal liability claims.

Personal Umbrella policies provide liability coverage starting at $1,000,000 and up for minimal premium. Umbrella policies can run as little as $300.00 for the year ($25.00 per month); however, everyone’s situation is different. Premiums are based on your underlying policies, which have a lot of different variables such as more vehicles, new drivers, number of homes owned, if you own any boats or watercraft, etc. The more exposure you have, the higher the premiums. It is important to have a trusted agent who will work with you to find the proper level of insurance to fit your needs and budget.

Example of how a Personal Liability Insurance would respond to a claim.

Mark was involved in an auto accident where he was found to be at fault, the accident resulted in serious injuries to the occupants of the vehicle he hit. The injured party sued Mark for $1,000,000 for medical expenses, “pain and suffering” and lost wages. The suit was awarded to the injured party and Mark will need to pay the $1,000,000. Mark currently has liability limit of $300,000 for his auto insurance. This means that the auto policy will pay out UP TO $300,000 and that is all. But where is that extra $700,000 coming from to pay the lawsuit? Unless Mark has a huge savings account this money will come from all his assets (home, retirement savings, college funds, wages, etc.); all this would be garnished. Fortunately, Mark had a $1,000,000 Personal Umbrella policy; the $700,000 would be covered by the Personal Umbrella Insurance policy and all of Mark’s assets were safe.

Even if you do not have a home, college fund or retirement fund to protect we still suggest purchasing an umbrella policy as the policy also protects your personal wages. In some settlements your wages can be garnished for up to 10 years.

Still unsure whether you should purchase a Personal Umbrella Policy?

If you are still unsure if you should purchase and umbrella insurance policy here are some circumstances of when we highly recommend purchasing an umbrella insurance policy.

  • Do you have a swimming pool?
  • Is your teenage child getting their driver’s license?
  • Do you have a dog?

If you are in any of these situations, we suggest purchasing an umbrella insurance policy.

Eligibility for Personal Umbrella Insurance Policies

Not everyone would be eligible for a Personal Umbrella insurance policy. Listed are some circumstances that would make a personal ineligible for purchasing an umbrella insurance policy:

  • Excessive auto claims
  • Prior liability claims
  • A prior dog bite claim
  • An open bodily injury auto claim
  • An open personal injury homeowner claim

Also, Umbrella insurance companies require you as the insured to have specific liability coverage on your auto/homeowner/boat, etc. insurance policies. If you carry liability limits that are under the specifically stated minimal amounts required, you will not be eligible for umbrella insurance unless you increase the liability limits on those policies. If you are unsure whether you would be eligible or not for an umbrella insurance policy contact your agent at Hanson & Ryan to discuss.

In today’s world people are quick to bring a suite against anyone no matter the reason. Why put your hard-earned assets at risk? For minimal premium you can make sure you have coverage in case of a “downpour”. Contact your agent at Hanson & Ryan to discuss purchasing a Personal Umbrella Insurance policy today!