Personal Liability Umbrella Insurance

We live in a highly litigious society, and a major insurance claim or lawsuit can lead to devastating financial loss. But a personal liability umbrella policy picks up where home, auto, boat, and other primary personal insurance limits leave off. An umbrella policy, sometimes referred to as “excess liability insurance,” is an extra layer of security to help safeguard you and your family’s well being if the unthinkable happens.

What are some examples of incidents where an umbrella policy helps?

Personal insurance policies have reasonable limits on most liability coverages, but in unique circumstances, those limits may not be enough, especially if you are sued and must mount a legal defense. There also may also be remarkable circumstances that are not covered under normal liability policies.

Consider a hypothetical in which you cause an auto accident that injures several people. Damage to the other vehicle (or vehicles) exceeds $50,000. Medical bills for the injured total more than $200,000. Furthermore, one of the injured must miss work for an extended time and sues for $100,000 in lost income. If your liability policy limit is set at $300,000, you have exceeded the total and are responsible for the overage out of your own pocket.

What if a fire at your home spreads and causes damage to other surrounding properties? What if you injure a swimmer while operating a rented boat? What if you cause an accident while traveling internationally? What if a business or high-profile figure sues you for libel or slander for something you posted online? As crazy as some circumstances may sound, incidents such as these do happen. It is times like those when an umbrella policy fills the gaps of any other existing insurance policies you may carry.

What are some activities that warrant consideration of umbrella coverage?

Certain situations and lifestyles lend themselves to increased potential for injuries and/or lawsuits, and thus the need for personal umbrella insurance coverage. Such examples may include:

Being a landlord
Coaching youth sports
Volunteering
Posting reviews of products and businesses
Hosting children when you own a pool or trampoline
Activities where you could injure others (skiing, surfing, hunting, etc.)

It is important to remember that settling or losing judgment in a lawsuit could not only wipe out your existing savings but take away from future earnings. As a result, personal umbrella policies help safeguard your assets and provide much-needed peace of mind. And, given its relative cost, Bankrate.com has called umbrella coverage “by far the best buy in the insurance business.”

For more information on products and coverage, contact your local field agent.

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Personal, life, disability, and annuity products are written through PMC Advantage Insurance Services, Inc., a wholly-owned subsidiary of Pharmacists Mutual Insurance Company.