Personal Umbrella Policy - Why Should I Have One?
Personal umbrella policy covers you in the event that damages (almost always under your liability coverages) from some accident or event caused by you exceed the limits of your "underlying coverage".
Typically the underlying coverage is the liability coverage in your auto or homeowners policy.
Let's say you own a trampoline.
It is in your back yard, and there is no fence or other restriction around it.
Neighborhood kids are playing on your trampoline, and one of them is severely injured.
Not only are the medical and rehab expenses huge, but you are sued by the kid's parents for negligence in leaving the trampoline unprotected and unattended.
You lose in court, and the parents are awarded $800,000.
Your homeowner's policy only covers you for $250,000.
Now you will have to make up the rest on your own.
Your personal assets are at high risk of being taken to pay the judgment against you.
This is where personal umbrella policies can save the day.
If you have assets of reasonable value to protect from such a judgment, a personal umbrella policy is a relatively inexpensive way to protect yourself.
It will cover you over and above your auto and homeowners policy.
You can choose limits from about a million dollars on up, usually for a relatively low premium.
The premium is low because the probability of a loss is low.
The consequences of such a loss, though can be devastating.
Because this policy sits above your home and auto coverage, it is called an umbrella.
Generally, your home and auto liability coverages must be selected at the high end - say $300,000 or $500,000 for most insurers, in order to add a personal umbrella.
Talk to your agent to make a good choice.
Typically the underlying coverage is the liability coverage in your auto or homeowners policy.
Let's say you own a trampoline.
It is in your back yard, and there is no fence or other restriction around it.
Neighborhood kids are playing on your trampoline, and one of them is severely injured.
Not only are the medical and rehab expenses huge, but you are sued by the kid's parents for negligence in leaving the trampoline unprotected and unattended.
You lose in court, and the parents are awarded $800,000.
Your homeowner's policy only covers you for $250,000.
Now you will have to make up the rest on your own.
Your personal assets are at high risk of being taken to pay the judgment against you.
This is where personal umbrella policies can save the day.
If you have assets of reasonable value to protect from such a judgment, a personal umbrella policy is a relatively inexpensive way to protect yourself.
It will cover you over and above your auto and homeowners policy.
You can choose limits from about a million dollars on up, usually for a relatively low premium.
The premium is low because the probability of a loss is low.
The consequences of such a loss, though can be devastating.
Because this policy sits above your home and auto coverage, it is called an umbrella.
Generally, your home and auto liability coverages must be selected at the high end - say $300,000 or $500,000 for most insurers, in order to add a personal umbrella.
Talk to your agent to make a good choice.