New Year, New Umbrella Insurance Protection

Posted by Peter Lanza on Wed, Jan 29, 2020 @ 12:03 PM

umbrella-insuranceThe start of a new year is always a favorite time for reflecting on the past and planning for the future. It’s also the perfect time to review your personal risk management strategies. A critical but often overlooked component of personal risk management is an umbrella policy, otherwise known as an excess liability policy.

Don’t have a personal umbrella policy (PUP)? Here’s why you should.

Many people mistakenly think that doctors, corporate executives, and others in litigation-prone professions are the only ones that get sued. But although you may not be at high risk, that doesn’t mean you’re at no risk. These days, anyone can be sued. In fact, many mundane daily activities can increase your chances of being sued, including:

  • Driving a car or participating in carpools
  • Owning a swimming pool or trampoline
  • Owning a dog
  • Frequently hosting guests
  • Traveling
  • Owning a rental property
  • Owning and operating a boat, snowmobile, ATV, or other recreational vehicle
  • Regularly blogging, tweeting, and/or posting comments or photos on social media

It's impossible to predict when you might be involved in an auto accident, when someone might get injured on your property, or even when someone might sue you for slander or libel. These kinds of unforeseen events can end up in a lawsuit that could devastate you financially.

If it happens to you, will you be able to protect yourself and your assets? You will if you have an umbrella policy with adequate coverage.

What does an umbrella policy cover?

An umbrella insurance policy is like the ultimate safety net. It provides an extra layer of protection above and beyond your homeowners, auto, and other primary liability coverages to protect your existing personal assets and future personal assets (like wages or an inheritance). Umbrella policies generally provide $1 million to $5 million in additional coverage, although you can get as much as $100 million if you have the assets that need protecting.

What’s not covered by an umbrella policy?

Since an umbrella policy is a form of personal insurance, there are things it won’t cover:

  • Lawsuits related to a business you own
  • Committing a crime and being ordered to pay restitution
  • Lawsuits from intentional acts such as sexual harassment, discrimination, intentional bodily injury, intentional property damage, and other willful and malicious acts
  • High risk activities such as drag racing with your vehicle

To get an umbrella policy, there are some underlying insurance requirements.  

You'll have to have a certain amount of auto and homeowner’s coverage to be approved for an umbrella policy. Because umbrella policies come with quite a few exclusions, you should consult with your insurance agent about specific coverages to make sure you’re adequately protected.

With sky-high lawsuit settlements on the rise, you should regularly review your umbrella policy.

In this litigious society, jury awards and settlements in the multimillions are becoming more and more common. So, it’s a good idea to regularly review your umbrella policy coverage to make sure you’re always protected from the unexpected. The beginning of a new year is the perfect time for reviewing and updating your financial strategy.

Need a personal risk management strategy that’ll help you sleep better at night? Contact the personal insurance professionals at BNC Agency today.

Tags: umbrella insurance