Umbrellas Are Not Just Protection For Rain!

Personal umbrella coverage, also known as a personal umbrella policy (PUP), is a type of insurance that provides extra liability coverage beyond what is offered by a primary insurance policy, like auto insurance or homeowners insurance. 

Two basic reasons for having a PUP are assets that require it and exposures to risk. Assets are easy. If you have more than $250K of assets, you should consider PUP coverage. Exposures to risk like having a swimming pool, rental property/tenants, having inexperienced drivers at home or owning any type of property that attracts people, could have a higher degree of liability exposure than others which can be protected with a PUP.

Personal Umbrella Policies cover a wide range of losses, including damages arising out of a covered occurrence anywhere in the world that you are legally obligated to pay because of:

• Bodily Injury: Medical costs, loss of income and funeral expenses of other people involved in an accident
• Personal Injury: False arrest, invasion of privacy, libel, slander, humiliation or defamation of another person’s character
• Property Damage: Physical destruction of someone else’s property, including the resulting loss of its use

Consider these potential real-life PUP scenarios:

• An accident on your swing set causes serious injuries.
• A guest has an accident around your pool that requires surgery.
• You’re burning leaves and cause a fire that damages neighborhood homes.
• You accidentally crash your boat into another boat.
• Your teen driver accidentally hits a pedestrian.
• A broken step causes your babysitter or a guest to have an accident.
• Your dog bites someone and you are sued for damages.
• You post a negative online review that results in an alleged defamation lawsuit.

Umbrella policies can help protect your assets by covering large medical bills, property damage, and legal defense costs that exceed your primary insurance policy’s limits. 

Personal Umbrella coverage doesn’t start from dollar one of a claim. PUP coverage sits on top of your existing home and auto liability sections of coverage. Most PUP’s pick-up automobile liability after your personal auto insurance pays its limits of $250K per person and $500K per accident. PUP coverage usually sits on top of homeowners’ liability limits of $300K but clients can carry higher limits. Being involved in a multicar accident or an accident with a high occupancy vehicle can severely limit your protection from just your personal auto policy.

PUP coverage isn’t just for the wealthy, with increasing settlement awards over the years, it’s important to have coverage that protects your assets and future wages. Besides the extra liability protection, the policy provides you with defense costs, attorney fees, personal injury protection and worldwide coverage.

While there’s no one-size-fits-all answer, a common recommendation from financial advisors is for the average homeowner to carry at least $1M PUP, even if your assets are valued below that amount. If you own rental property, your coverage needs could range between $3 to $5 million.

Contact Atlantic Insurance for more detailed information on how a PUP could help you and your household be more secure.