Personal Umbrella Policy | What Are You Missing Out On?
Personal Umbrella Policy (PUP)
Here are some common reasons I hear for not having an Umbrella:
• I cant afford it.
• I’m not rich, I don’t need it.
• I will never use it.
Umbrella policies are very affordable, you don’t have to be rich to get sued, and you never know when you may need it.
Personal Umbrella Fact
About one in 830 homeowners policies have a liability claim related to the cost of lawsuits for bodily injury or property damage that the policyholder or family members cause to others. As mentioned above, personal umbrella insurance is designed to cover catastrophic situations where a legal award could exceed the limits of your primary liability insurance.
An umbrella policy is a completely separate policy from homeowners insurance. While every home and auto policy will have its own personal liability insurance included, a personal umbrella policy will upgrade the limit to as high as 5 million. Most insurance companies will require certain limits are reached in order to qualify for this policy. Usually for auto it is 250,000/500,000/100,000 and home is 300,000. This type of policy would really appeal to someone who has quite a few policies. A personal umbrella policy’s main purpose is to serve as blanket coverage for all of the different types of polices one may have. For Example:
ATV / Snowmobile
A PUP will also cover you if you accidentally damage someone else’s property.
Why should I purchase it?
A personal umbrella policy also covers you for additional perils that are excluded from the homeowners insurance.
Also it is fairly inexpensive. On average you can purchase a policy from between $300 to $400 dollars per year, $25 to $35 per month. You can obtain a 1 to 2 million dollar umbrella policy at these rates. If you are insuring a full family, with children that are licensed, a PUP is a great idea. You have to be mindful that legally you are responsible for your children in the event of an accident.
How much coverage should I purchase?
Alright, you have decided a personal umbrella policy is right for you. Now how do you know how much coverage to take out? It is recommended that you have enough coverage to cover all of your assets. It is impossible to know how much you could possibly be sued for. If someone is seriously injured or killed it is likely you will need a substantial amount of coverage. If you are sued for more then the coverage limit on your policy you will be financially liable to pay the rest of the lawsuit.