…rainy day coverage even if you aren’t rich or famous…
Before we launch into a discussion of “Who needs a Personal Umbrella Policy (PUP)?” let’s start with a definition, shall we?
What is a Personal Umbrella Policy?
Personal Umbrella Policies provide liability coverage beyond the limits of your underlying policies (e.g. home, auto, renter, landlord, boat, motorcycle, etc.). By definition, a liability insurance policy indemnifies (i.e. it “makes whole”) others because of damage or injuries cause by your negligence. A PUP also provides personal injury liability protection against claims due to libel, slander, invasion of privacy, and more. Your other policies do not provide this type of coverage.
The limits of protection are very high, typically starting at $1,000,000 and increasing in one million dollar increments. Most carriers require high liability limits on the underlying policies but this also serves to make the cost of the PUP affordable.
OK. So now you know enough about “What is a Personal Umbrella Policy?” to be able to have an intelligent conversation with your insurance agent.
Who Needs a Personal Umbrella Policy?
The obvious answer is: the rich and famous. Unfortunately, most of us are neither rich nor famous. However, we likely either engage in certain pursuits or present risks inherent in our lifestyle or family life cycle that can increase the possibility of lawsuits or losses and accidents.
Here are some examples of Pursuits and Life Cycle/Lifestyle Risks:
If you serve on the board of a non-profit organization, you have a much higher public profile than an average person and may be a target for lawsuits. Also, you might be held to a higher standard of conduct if you are clergy, counselor, or coach. Failure – or perceived failure – to meet these standards can result in a lawsuit.
Life Cycle/Lifestyle Risks
The risks presented by you and your family change over time and there are certain key Life Cycle events that trigger a greater need for increased liability protection, for example:
- Significant increase in income
- Large inheritance
- Inexperienced drivers in the household
- Increased commute due to a job move or a relocation
- Long weekend trips to visit kids in college or aging parents
- Purchase of a vacation or a rental property
- Retirement or Pre-Retirement
Your risks increase with certain Lifestyle choices as well, although most of us don’t realize it. The harm inherent in the following leisure activities and amenities requires not only increased awareness of safety measures but also present an opportunity for a lawsuit:
- Waverunner / Jet Ski
- Recreational Vehicle
Do You Need a Personal Umbrella Policy?
That is a question you need to answer for yourself. Talk to your agent and let him/her uncover your needs and develop a plan for protecting what is important to you. A PUP may not be as expensive as you think and you cannot put a price on piece of mind.
Remember: ‘This isn’t the Sears and Roebuck!’ You can’t exchange your protection once the damage has been done. It is important to have the protection before you need it.
“Stop being your own insurance agent!”
Gary Filippi, Allstate Agency Owner
981 Sunset Lake Rd
Fuquay Varina, NC 27526
Facebook: Gary Filippi Insurance Group