Most of the time life is fairly uncomplicated. We work, we have hobbies, we take a vacation now and then and generally just enjoy the day-to-day. Occasionally, however, something bad happens. The kind of bad stuff that can lead to lawsuits. It could be related to your hobby – think of a boating accident in which several people are injured. Or, an auto accident in which you are responsible for severe injury or the death of another person. Bad stuff happens and when it does a personal umbrella policy is the best protection from lawsuits and monetary judgements against you.
An umbrella policy is probably one of the most aptly named products in the world of insurance. We sometimes use too much technical jargon like “HO3” or “Condo Unit Owners Insurance” that are far from self-explanatory. Umbrella insurance, however, is just that – a big chunk of liability coverage that wraps over all your other insurance policies. The minimum limit available is typically $1,000,000 and many insurance providers offer up to $10,000,000 or higher for qualified customers.
An umbrella policy is liability insurance, which means it protects the policyholder from 3rd party claims. These are claims, or lawsuits, filed against you by someone else for injury, property damage or other bad things (such as defamation, slander, libel).
To qualify for an umbrella policy you need to carry certain underlying limits of coverage. For example:
- Auto insurance liability limits of at least $250,000 each person and $500,000 each accident. Property damage liability of at least $100,000. Some carriers may require $500,000 single limit.
- Personal liability coverage (usually found on your homeowner insurance) of at least $300,000
- RV, watercraft, motorcycle insurance with limits equal to your auto insurance (see above)
All umbrella policies are NOT created equal. Before buying a policy, make sure it contains the following features:
- Broad definition of bodily injury (including humiliation and mental injury)
- Pre and post judgement interest
- Volunteer activities including youth sports
- Host liquor liability
- No annual aggregate
- No schedule of underlying insurance (newly acquired vehicles, rental vehicles and newly aqcuired real estate automatically covered).
- Optional coverage for Uninsured Motorist bodily injury
At Safeguard, we offer umbrella policies in combination with your auto and home insurance, or as a stand-alone policy. We represent several “A” rated carriers including Encompass, USLI, AAIC, Allied, Travelers, Safeco andHartford. Contact us today for a no-obligation quote and great advice on personal umbrella insurance.