Personal Umbrella Coverage - protection when it is critical
The potential to be responsible for a large liability settlement is not as remote as you may hope. If you drive on the roads, you can be involved in an at fault accident that could result in serious injuries or deaths. Someone can slip and fall on your property and suffer serious injuries. An internet posting can create a claim of advertising injury for a third party. Your service on a non-profit board of directors can cause a claim against you. The unfortunate fact of modern life is that liability follows all of our actions.
A personal umbrella or excess liability policy provides higher limits of coverage to protect you from a large liability claim. This policy adds additional limits to the policies that it covers. It is an affordable way to access higher limits at a reasonable cost.
We address the immediate risk exposures by purchasing homeowners, tenant or a condominium policy and auto insurance. The first risk management step is knowing what your limits of insurance are for each coverage. In the world of online insurance products, only paying for what you need and offers of immediate savings, you may find that your liability protection is less than imagined.
Homeowner’s policies can offer liability limits as low as $100,000. This limit can be easily exhausted by a serious injury event. If you have a dog, a trampoline, a swing set, a swimming pool, steps, or a pond you have the contributors to a million-dollar homeowner’s claim. These types of events are a routine occurrence, and the dollar values of the court decisions are trending upward.
State minimum auto insurance can offer limits as low as $25,000. This liability limit will not pay for a new car, much less a serious injury.
Limits of insurance are important because low limits on the primary or underlying policies may make getting an umbrella or excess liability policy impossible. Ask you agent what the minimum limits are required to have your carrier offer an umbrella policy. This limit of insurance should be the minimum that you would consider buying.
The Umbrella policy
The first question is what policies does the umbrella cover? Your umbrella should cover your general liability coverage and auto coverage as a minimum. If you have other liability coverage such as professional coverage, ask if the umbrella can also include those policies.
In some cases, the agent will structure the underlying insurance program to meet the requirements of the umbrella carrier to allow you access the higher limits of coverage. Both layers of the program must work together to provide protection.
Selecting a Limit
The real question is what do you need to protect? What is your net worth? What is the trajectory of your net worth? What are the values of your property and securities? The more you have, the more you have to lose. All of your assets may be subject to attachment for a liability claim.
Consider the scope of the exposures you are covering. The higher the profile of the event contemplated, the higher the potential losses. The umbrella limit is a very fact specific choice and should be carefully considered.
It is not unusual for automobile and homeowners’ insurance to be with different companies. In this situation be sure that your umbrella carrier will support all of the underlying insurance policies. Some umbrella carriers may not support a given company or may have a requirement for a higher underlying limit than that carrier offered you.
The Driehaus Difference
We do not believe that insurance can be placed in 15 minutes. We also recognize that you may not know what you need since you are not an insurance professional. We want to understand your specific exposures and risk tolerance to help you reach a good decision. This is not something that is done online or with a call center. You need to carefully consider and evaluate your options. We can help you see what is available and the cost of that protection. Call us at 513-977-6860 or contact us on the internet at www.driehausins.com