Umbrella Insurance


Umbrella Insurance
A Personal Liability Umbrella Policy (PLUP) provides Umbrella Insurance to cover excess liability.

Umbrella Insurance does not prevent accidents or mishaps but it does protect you from a devastating financial reality you may experience.
When your primary insurance coverage (Auto, Homeowners/Renters) liability limits are breached you are responsible for the excess liability at 100%.

An Umbrella insurance policy provides you with excess protection which typically substantially exceeds that of your primary coverage.
Most Umbrella policies require the insured to maintain specific policy limits on primary policies.





Who Can Benefit from Umbrella Insurance?

  • Anyone with assets to protect
  • Everyone who drives a vehicle, including a car, motorcycle, boat, or ATV
  • Everyone who owns or rents a home

We live in a litigious society, we must protect our assets from lawsuits. The primary reason for carrying umbrella insurance is that you never know what you may be responsible for.
Accidents happen, and when they do, you may be held legally responsible for resulting bodily injury and property damage as well as legal fees, all of which can quickly escalate to hundreds of thousands of dollars.

If you are found responsible for an accident, and the legal system makes a judgment that, between you and the injured person, you should be the one to shoulder the financial repercussions.
The person who suffered damage is then entitled to collect what is owed against your assets or against insurance proceeds.
If the money provided by the insurance company is inadequate, a claim may be made on your income, assets, and savings.

Adequate liability insurance protects you from these financial consequences.
Pain and suffering, lost wages, medical bills, and property damage are some of the items you may be sued for that are covered by umbrella liability insurance.

What Does Umbrella Insurance Cover?

To be insured many insurers will require that your primary policies are at specific minimum levels.
A personal umbrella insurance policy provides additional protection by increasing coverage for liability in two ways:

Excess Liability

This on average requires you to increase the coverage of your primary policies.
In the event that your auto insurance liability limit is 300,000 and you purchase an Umbrella liability policy at $1,000,000 your total coverage available including excess would be $1.3 million dollars.

Claim Coverage

An umbrella liability policy covers can cover claims excluded by primary policies in certain circumstances.
These types of liability or damage claims resulting from false arrest, libel, slander, or defamation of character may be excluded by underlying policies.
If you are held liable for damages caused by these types of claims, the umbrella policy can help you cover some costs.
The $300,000 liability limit in the prior examples may seem like a lot of coverage in the abstract, but can easily be exceeded in serious accidents.

How Much Umbrella Insurance Do You Need?

The right amount of liability insurance for any individual or family depends upon a number of factors.
These factors and the associated risks you face are unique and will vary depending on the assets and income you wish to protect.

You can look at the value of your assets to determine the amount of liability coverage you need.
Our agency recommends that you carry enough liability coverage to cover your assets for over to 5 times their value and for high-income earners a minimum of ten times of your annual salary.
We also recommend you look at the specific risks you face as the costs of medical payments, and legal fees can greatly exceed our basic recommendation.
It is always best to purchase coverage for what you have and talk to a licensed professional about your specific case before purchasing coverage.

Umbrella Liability Claim Examples:

Dog Bites: Your dog escapes the yard and attacks a neighbor, resulting in extensive medical costs.
The umbrella policy covers the excess costs of hospitalization, care, and rehabilitation after your homeowner’s liability coverage is exhausted.

Auto Accident: Despite your careful driving and best intentions, you cause a serious accident.
Your umbrella policy covers you if the damages exceed the $300,000 liability coverage limit on your auto policy.

Trampoline: Your child has a few friends over from school and they are playing on the trampoline in your yard.  One child flies off, suffering a spinal cord or other serious injuries.
Your umbrella liability manages the excess costs after you exceed the limits on your homeowners or renter’s liability policy.

Do You Need More Liability Coverage?

You may want to give special consideration to an investment in umbrella insurance in the following circumstances:

  1. You are at greater risk for liability if you own a pool or trampoline or ride a powerful motorcycle.
  2. If you have assets at risk, including retirement savings, business income, college funds, and other assets with total values that exceed the liability maximum on your home or auto policy.
  3. You earn or have significant earning potential.

Statistics indicate that these activities and others are more likely to lead to expensive liability claims.
Contact us today to review your coverage options to protect against excess liability.