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Personal Umbrella Policy: What is it and do I need one?

People have insurance for one reason: to protect their family and assets. But when you start playing out the “what ifs” you may find yourself in a situation where your home or auto insurance could not be enough. That’s precisely when a personal umbrella insurance policy gives you the coverage you need!

A personal umbrella policy (PUP) is a type of insurance that provides liability coverage above and beyond your auto home policies. Say an accident occurs at your home and someone is injured. If the liability coverage isn't enough to pay for damages a personal umbrella insurance policy kicks in right where your other liability underlying limits have been reached.

To better understand how a personal umbrella policy works, here's an example: If you're at fault in a car accident that injures another driver, your regular automobile insurance will cover the other driver up to the limit you selected, say $250,000. But what happens if the needs are greater than that limit? The other party could sue you which means your personal assets would be at stake. It could be for a small amount, but imagine if that injured driver were a surgeon or another highly paid professional. What if the accident you caused resulted in an injury that kept that person from doing their job for six months? Suddenly, you have a lawsuit on your hands for the $1 million to cover the time away from work.

Your automobile policy covers the initial $250,000, but where would you come up with the remaining $750,000? A personal umbrella policy would provide the additional costs when your auto insurance isn't enough. The PUP is in place so that you don't get stuck trying to pay the remaining balance yourself. This extra policy could protect your bank account, home, and other personal property.

In most cases, personal umbrella policies are available in million dollar increments, from $1 to $5 million.  Beyond covering your liability costs, a personal umbrella insurance policy would cover attorney costs and lost wages, even if you're out of the country. While PUP coverage is not required, it offers increased protection in the unfortunate incident of an accident.

Contact us today for more information. If you're already insured with us, you may be eligible for a discount!