With a Personal Umbrella Insurance policy, you get an additional layer of liabilitycoverage beyond that provided by your homeowner’s, auto, boat, and recreational vehicle policies.
Personal Umbrella Insurance is a relatively low-cost way to provide additional coverage if you’re sued for bodily injury or property damage beyond the limits of your existing policies. Coverage is usually issued in one million dollar increments, typically in the one to five million dollar range.
What Personal Umbrella Insurance Is Not
Personal Umbrella Insurance does not provide basic home, auto, boat, or RV coverage. It only kicks in after the limits to these standard policies are exhausted.
In most instances, Personal Umbrella Insurance does not protect against business losses. Some homeowner’s policies may allow for certain exceptions to this rule for those who have a home-based business or a home office. If not, many insurance companies offer Commercial Umbrella Liability coverage.
Who Needs Personal Umbrella Insurance?
In the past, usually only very wealthy individuals purchased Personal Umbrella Insurance. In our increasingly litigious society, however, more and more people of all income groups are considering it in order to protect their current assetsand future earnings.
The following people are especially likely to benefit from Personal Umbrella insurance:
Swimming pool, hot tub, and trampoline owners.
Families with young drivers.
Sports enthusiasts (snow and water skiing, horseback riding, rock climbing, golf, etc.).
Owners or operators of operate watercraft, off-road, and recreational vehicles.
Owners of rental property.
Those who frequently host recreational activities on their property.
People who serve on non-profit boards that might be exposed to liability.
Things To Think About
The basic question to ask yourself is whether you feel you have adequate liability coverage with your existing home and auto insurance policies. Keep in mind that both your current assets and future earnings could be stripped away by a single lawsuit.
Some insurers may require you to have home and auto coverage with them in order to extend additional Personal Umbrella Liability Insurance, or they may require you to satisfy certain liability coverage limits with your existing policies.
The cost of Personal Umbrella Insurance depends on your coverage limits; number of vehicles, residences, boats, etc. that you own; and your location. The average cost of a million dollars’ coverage is typically less than $200 per year.