Do you have an umbrella policy? Do you even know what an umbrella policy is??
If you don’t know, you’re not alone. Many don’t really know what this term means. Basically, an umbrella policy is extra liability insurance above and beyond your regular policy. It’s extra back-up. Extra coverage to “keep you dry”. (See what we did there with the umbrella reference?)
There are many reasons an individual should have an umbrella policy. But here are 3 big ones:
- Primary policies (such as homeowners and auto) generally do not provide liability limits equal to the exposure you might face.
- The price of an umbrella policy is comparatively inexpensive. And, in some cases, it may even lower the premium of other lines of insurance.
- Perhaps most importantly, umbrella policies not only provide coverage when losses exceed the available primary limits (also known as underlying limits), but add coverage for certain types of losses such as “personal injury” claims that are generally not covered by primary policies.
Here are some actual claims Travelers has seen on a personal umbrella policy, so you can see how this might work in the real world.
- A babysitter left a 5 month old infant unattended in a walker. The infant toppled the walker, struck her head on the floor and suffered brain damage. The parents of the infant sued the teenage babysitter and her parents. The court awarded the infant’s parents $11,000,000.
- A 28-year old engineer dove into a friend’s above ground swimming pool struck his head on the bottom and, as a result became a quadriplegic. He sued both the homeowner and the pool manufacturer. The court found the homeowner to be 60 percent responsible and the pool manufacturer to be 40 percent responsible, and awarded $10,000,000.
- A hillside on the insured’s property was covered with concrete to prevent erosion. The concrete had been installed before the insured purchased the property. Approximately 5 feet of the concrete fell to the neighboring property knocking the claimant’s home from its foundation. The
resulting claim was settled for $970,000.
Are you still confused? Or do you have questions about your individual policy? Call us at 763-551-1300. We are happy to discuss if this type of policy makes sense for you, and provide you with a free quote if it does.