A Personal Umbrella Policy provides excess liability protection for damages you may be found liable for over and above your auto, Homeowners, condo owner, renters, Landlords, Boat owner, Motor home and other personal insurance policies that provide personal liability coverage. Personal Umbrella policies generally start at a minimum of $1,000,000.00 and most companies go up to $5,000,000.00 or higher. These policies exclude business related exposures, so if you own a business, even a small home business liability claims resulting from business operations will not be covered under the Personal Liability policies. Businesses are covered through a separate General Liability policy or a Business Owner policy, which will be covered in a different article.
Do I need a Personal Umbrella Policy?
The answer is simple, just list all your assets like Home equity, Stocks, Bonds, Mutual Funds or any other investment accounts (not related to retirement account like IRA’s, 401K’s or 403B’s), Life insurance policies with cash values, cars you own and any other liquid asset. If you are not sure call your accountant and ask him to evaluate your balance sheet and let you know what your Net-Worth is. After you are done totaling your assets add your annual income (combine income for married couples). The number you come up with is the minimum level of liability coverage limit you need to buy. Let’s say you have $300,000 equity in your home, your investment portfolio is worth $750,000 and you have $150,000 equity in an investment property, and your annual household income is $145,000. Adding all those assets total $1,345,000 so you need to protect at least $1.4M of your assets. You will need to purchase a $2,000,000 Personal umbrella policy because you need more then $1M and most insurance companies will not sell these policies in a $500,000 limit.
Where can I buy a Personal Umbrella Policy?
1. Call your Insurance Agent/Broker. The Agent who is insuring your Home and Auto will probably be able to set you up with a PUP (personal umbrella policy).
2. If your driving record is less then perfect or if you have a liability claim in the last 5 years you will probably need to search for high risk insurers online or contact an Insurance Broker.
Important information:
It is important that you gather some information prior to calling an agent/broker. I recommend finding all your insurance policies like Homeowners, Auto, Motorcycle, Motor home, Boat owner … and any other personal policies that provide liability coverage like Landlord, Renters … I also recommend making a list of all your household members, because you want to make sure no one is omitted from the policy because you didn’t disclose them to the agent/broker. Also remember to list any additional properties and vehicles you own as well as any family pets. Be honest with your agent and disclose all the information so that he/she provides the highest and most suitable level of coverage. There is no point in paying for this policy and not disclosing to the insurance company that your family pet is a pit-bull, because dog bites may be excluded from the policy and you didn’t know because you didn’t tell your agent/broker upfront. You can see how this could present a problem if Sparkey decides to bite the mailman, or even worse like your child’s friend or one of your guests during a holiday party.
Check with your Agent/Broker for their underwriting guidelines and policy exclusions and don’t be afraid to ask questions.
Do I need a Personal Umbrella Policy?
The answer is simple, just list all your assets like Home equity, Stocks, Bonds, Mutual Funds or any other investment accounts (not related to retirement account like IRA’s, 401K’s or 403B’s), Life insurance policies with cash values, cars you own and any other liquid asset. If you are not sure call your accountant and ask him to evaluate your balance sheet and let you know what your Net-Worth is. After you are done totaling your assets add your annual income (combine income for married couples). The number you come up with is the minimum level of liability coverage limit you need to buy. Let’s say you have $300,000 equity in your home, your investment portfolio is worth $750,000 and you have $150,000 equity in an investment property, and your annual household income is $145,000. Adding all those assets total $1,345,000 so you need to protect at least $1.4M of your assets. You will need to purchase a $2,000,000 Personal umbrella policy because you need more then $1M and most insurance companies will not sell these policies in a $500,000 limit.
Where can I buy a Personal Umbrella Policy?
1. Call your Insurance Agent/Broker. The Agent who is insuring your Home and Auto will probably be able to set you up with a PUP (personal umbrella policy).
2. If your driving record is less then perfect or if you have a liability claim in the last 5 years you will probably need to search for high risk insurers online or contact an Insurance Broker.
Important information:
It is important that you gather some information prior to calling an agent/broker. I recommend finding all your insurance policies like Homeowners, Auto, Motorcycle, Motor home, Boat owner … and any other personal policies that provide liability coverage like Landlord, Renters … I also recommend making a list of all your household members, because you want to make sure no one is omitted from the policy because you didn’t disclose them to the agent/broker. Also remember to list any additional properties and vehicles you own as well as any family pets. Be honest with your agent and disclose all the information so that he/she provides the highest and most suitable level of coverage. There is no point in paying for this policy and not disclosing to the insurance company that your family pet is a pit-bull, because dog bites may be excluded from the policy and you didn’t know because you didn’t tell your agent/broker upfront. You can see how this could present a problem if Sparkey decides to bite the mailman, or even worse like your child’s friend or one of your guests during a holiday party.
Check with your Agent/Broker for their underwriting guidelines and policy exclusions and don’t be afraid to ask questions.
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