What is Personal Umbrella Insurance Coverage and Why Should Everyone Have It?

What if:

  • You are in a car accident and injure or kill another party
  • Skiing in Vermont, you collide with another party and injure them
  • You are in an altercation with another person and they are injured
  • You drive into a building and don’t have enough property coverage
  • On the Merritt Parkway or I-95, you cause a multi-car accident
  • You are in a car accident and cause over $100K in damage to another car

If your homeowner’s or auto policy pays a maximum $300,000 for liability, you would be in a tight spot. Where will the rest come from — future earnings, selling your home, forfeiting an inheritance?

Protect Your Assets

One way to help protect your assets from law suit settlements that exceed the coverage limits of your homeowner’s and auto policies is to purchase personal umbrella liability insurance.

An umbrella insurance policy gets its name because it provides extra layers of protection in the event you exceed the maximum limits of your other liability insurance.

Umbrella policies are usually offered in increments of $1 million and they typically require deductibles equal to the coverage limits on your homeowner’s and auto policies.  Most umbrella policies require a minimum base liability limit of $300K and sometimes $500K.

Umbrella Liability: Not Just for the Rich

Juries typically don’t take into account a defendant’s ability to pay when deciding the amount of an award, so exposure to risk can affect people at all income levels. Just having a swimming pool or a teenager could expose you to additional risk. If you don’t have enough liability coverage to resolve a claim or a lawsuit, the plaintiff could go after your house or other assets, depending on the laws of the state where you live.

Umbrella Policies – Not Just for Home or Auto

Many umbrella policies include coverage for things excluded on standard auto, renter’s, and homeowner’s policies such as libel, slander, invasion of privacy, defamation of character, or other personal injuries. Some umbrella policies also provide coverage if you face personal liability arising from your service as a board member of a civic, charitable, or religious organization (this is usually a D&O endorsement that is added to the umbrella).

When you review your insurance coverage, consider the added protection an umbrella liability policy can offer. A policy can be designed to fit your particular situation and potentially grow with you and your family.

I’m retired. I’m trying to limit my expenses. Why should I have an umbrella?

Great question. When you are ready to retire or have already done so, this is the most critical time to have an umbrella policy.  You have spent a lifetime building your assets and net worth, now you want to enjoy the fruits of your labor. What happens if you are liable for something and are sued? If you don’t have proper liability coverage, all of your hard work can be wiped away. Spending a few hundred dollars a year for a few million in liability coverage can help you enjoy your retirement without worry.

For more information reach out to Daigle & Travers Insurance.  We have three convenient locations in Connecticut: Wilton, Darien, and Westport.  One of our many experienced insurance professionals will be able to guide you through the insurance process.  We can be reached at 203-655-6974 or at info@dt-ins.com