Personal Umbrella Policy

If you’ve never heard of an Umbrella Policy we wouldn’t be surprised. Umbrella Policies, also known as Personal Liability Umbrella Insurance are some of the most under-utilized insurance policies on the market. Although not standalone policies, an umbrella policy is a great tool to have in your family’s financial arsenal.

What is a Personal Umbrella Policy?

A Personal Umbrella Policy is an overarching policy that provides extra liability coverage above and beyond what liability is already paid from an underlying policy (home, auto, boat, etc.) Liability is when you are responsible for injuring or damaging another person or their property. These policies are one of the safest (and most affordable!) ways to protect your family’s assets and financial future from a large unforeseen accident cause by your or a member of your household. Below we will look at some hypothetical situations in which a personal umbrella policy could help provide financial protection.

Hypothetical 1

You forget to turn your stove off in your apartment and you head to the store. When you come back you realize that the smoke from the burning food caused the building sprinklers to activate and ruin your neighbor’s expensive art collection.

How an umbrella policy would help: The liability coverage on your renter’s policy may not be able to cover all of the damages, however the higher limits of an umbrella policy could help you pay for the extra amount once your renter’s policy has paid to its maximum liability limit.

Hypothetical 2

You have a BBQ at your house but leave the garden hose out across the patio. Your friend trips over the garden hose, falls, and breaks her hip. Your homeowner’s policy will not cover all the medical bills, loss of income, and pain & suffering to your friend.

How an umbrella policy would help: The amount your friend is owed is more than what is covered on your standard homeowner’s policy, however, the higher limits of an umbrella policy could cover the extra costs.

Hypothetical 3

Your teenage son is learning how to drive and accidentally rear ends a vintage Ferrari. The cost of replacement parts and repairs may be above the limits of your current auto policy.

How an umbrella policy would help: The higher limits of your umbrella policy could cover the costs of repairs.