What is Personal Umbrella Coverage?
Jun 26 , 2015
A personal umbrella policy (PUP) is a type of insurance that provides liability coverage over and above your personal automobile(motorcycle, boat, & rv) or property (homeowner, condominium, landlord &renters) policy. So, if your liability coverage isn't enough to cover the damages of an accident you cause or an incident on your property, a personal umbrella insurance policy kicks in right where your other liability underlying limits have been reached. An umbrella policy can protect you when your automobile or property insurance isn't enough. Furthermore, a personal umbrella policy will not cover a business enity.
For instance, in a car accident, if the other driver's injuries are severe, the person might require benefits beyond the limit of Bodily Injury limit on your auto policy, for instance $250,000 your policy covers. In this case, the person could sue you, which means your personal assets would be at stake. This could be a small amount, but imagine if that injured driver were a surgeon or another high paying professional. What if the accident you caused resulted in an injury that kept the person from doing his job for six months? Suddenly, the person is suing you for $1 million to cover the six months the person is 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 can cover the additional costs when your insurance isn't enough. The PUP could provide the additional coverage you need 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.
What is Excess Liability?
Available in amounts ranging from one to five million dollars, excess liability coverage increases your personal liability limits by adding protection to your current auto, boat or homeowners policies. Also, if something is not covered in your homeowners policy (like libel), and it's not specifically excluded in the excess liability policy, you're covered.
Excess liability coverage provides:
- Protection for covered claims by others for personal injury or property damage caused by you, members of your family/household, or hazards on your property for which you are legally liable
- Personal liability coverage for occurrences on or off your premises
- An additional layer of protection above your primary auto policy against auto-related liabilities
- Protection against non-business related personal injury liabilities such as slander, libel, wrongful eviction or false arrest
- Legal defense costs for a covered loss. Lawyer fees and associated court costs are covered
- Worldwide coverage- no matter where you go, with the only exception being situations involving foreign ownership of dwellings or cars
Often, insurance policies are defined not by what they cover, but by what they don't. This is especially true for excess liability products. If something is not specifically excluded, you're covered. Exclusions vary widely by company. Here are some common exclusions:
- damages expected or intended by insured.
- damages arising out of business or professional pursuits.
- liability assumed under contract or agreement.
- liability arising out of ownership, maintenance, use, loading or unloading of aircraft.
- liability arising out of ownership, maintenance or use of non-traditional watercraft such as jet skis, air boats or air cushions.
- liability arising out of ownership, maintenance or use of most recreational vehicles. Only snowmobiles and golf carts are covered.
- damages to property you take care of, own or use.
- damages covered under a Workman's Compensation policy.
- liability arising out of war or insurrection.