If you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage, paying for judgments against you and your attorney’s fees, up to a limit set in the policy. However, in our litigious society, you may want to have an extra layer of liability protection. That’s what a personal Umbrella Insurance Policy provides.
~~ Let’s say your neighbor slips and falls on your propety and successfully settles for 1.5 million dollars. Your homeowners insurance tops out at $500.000. Your Umbrella Insurance would cover the rest.
~~Another Example would be if your dog bites and seriously injures someone and you would be responsible for some extensive medical expenses.
~~Your teenager is at fault in a major car accident, harming several people and causing damage well in excess of your $300,000 car insurance coverage limits.
Claim Scenario #1
The Insured’s 18 year old son was driving the Insured’s car on a short trip to the store with his girlfriend, the Claimant. The car left the roadway and struck a tree. The Insured’s son told the police that a vehicle cut him off, but there were no witnesses and no evidence of any impact with another car. The Claimant has no recollection of the accident.
The Claimant, a 19 year old college student, was hospitalized for over a month with multiple fractures and internal injuries. She was in a wheelchair but is now able to walk with crutches and continues with physical therapy. She has a right drop foot as a result of the injuries. The Insured’s personal umbrella policy limit was paid.
Claim Scenario #2
Claimant, age 2, was on the Insureds’ property with his grandparents who were there to care for 2 horses owned by the Insureds. The Insureds were out of town on vacation. The Claimant was kicked by one of the horses, taken to the emergency room, and then life flighted to a larger hospital.
The Claimant was given a 5% chance of survival and underwent surgery for a cracked skull (a piece of which was missing) with 30% damage to the right side of his brain. He survived and is residing in a neighboring state at a rehabilitation center. A large payment was made under the personal umbrella policy.
Claim Scenario #3
The Claimant and Insured have been longtime friends, live on the same street, and the Claimant had been to the Insured’s home on many occasions. The Insured lives in a home with a brick patio which had been constructed in the 1960s. Bricks were replaced one year before the incident. An area of the patio is bordered by an 18 inch retaining wall with a flower bed between the wall and the brick patio.
The Insured, Claimant, and another Friend met at a club, had a few drinks, and all returned to the Insured’s home where they sat on the patio in lawn chairs and continued drinking. At approximately 11:00 PM, the Insured went inside to the kitchen. The Friend also entered the house to call a cab.
When the Friend went back outside, the Claimant was no longer on the patio. He found the Claimant unconscious on the ground on the other side of the patio retaining wall. The Claimant remembers falling, but does not remember how it happened.
According to the Insured, on other occasions when the Claimant had been at the home, a patio table was in front of the retaining wall. The table had been removed, exposing an area of the wall.
The Claimant, age 56, sustained a spinal cord injury which rendered him an incomplete quadriplegic. He underwent surgery and was on a feeding tube for several months. He was able to return home 6 months after the incident, but continues to suffer partial paralysis of his arms and legs. He uses an electric wheelchair to get around his house and requires assistance with some activities of daily living.
The Claimant owned his own business and was married 1 month before the incident. His wife now cares for him at home. The settlement to the Claimant exhausted the underlying coverage limits and payment was made under the personal umbrella.
How much coverage does someone need for an Umbrella Policy? You would at least want enough to cover the value of all your assets. How much does a Umbrella Policy cost? While annual premiums vary by company and other variables, they can be as low as $138 for a $1 million limit for a husband and wife with one home and 2 vehicles. Higher limits are available. Peace of mind sometimes comes at a very reasonable price.
An Umbrella Insurance policy kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condominium or auto policy. It will also cover you for things such as libel and slander.
For about $150 to $300 per year you can buy a $1 million personal umbrella liability policy. The next million will cost about $75, and $50 for every million after that.
Because the Personal Umbrella Insurance Policy goes into effect after the underlying coverage is exhausted, there are certain limits that usually must be met in order to purchase this coverage. Most insurers will want you to have about $250,000 of liability insurance on your auto policy and $300,000 of liability insurance on your homeowners policy before selling you an Umbrella liability policy for $1 million of additional coverage.
Give us a call at (636) 394-9070 or email us at firstname.lastname@example.org and we will answer all your questions about Umbrella Insurance