Personal Umbrella Policy : Get Your Facts Right
What is a Personal Umbrella Policy?
A personal umbrella policy is an insurance policy that provides additional protection to insurance holders and their families on an excess basis over different basic personal insurance policies like auto insurance policy, home insurance policy and boater's policy. Since the umbrella policy provides excess liability insurance over the insured person's primary policies, it is also known as excess liability insurance.
Personal umbrella insurance coverage is usually large and is applicable worldwide. It applies to losses that have not been covered by primary personal insurance policies. In other words, the compensation comes only after the limits of the underlying basic policies have been fully exhausted. A standard umbrella policy usually provides coverage on a single limit occurrence basis.
Befitting its name, personal umbrella policy only pays compensation for claims, lawsuits and judgments that are related to one's personal life and affairs. Business or professional claims are not considered under the personal umbrella policy. Of course, special coverages have been arranged for some business affairs / dealings like ownership of office buildings, retail and rental residences.
What Liability Coverages Are Assured By The Personal Umbrella Policy?
The liability coverages included as part of personal umbrella policies are the use and ownership of real estate and automobiles, even boats and jet-skis. Travel activities and other civic-affair going-ons such as libel and slander allegations are also considered under the personal umbrella policy.
At times, the personal umbrella policy provides coverage for "personal injury". Here, personal injury does not stand for any bodily injury or property damage of the insurance holder; it rather provides protection against the infringement of one's rights, livelihood and renown. Defamation cases, false arrests/imprisonments, invasion of privacy, malicious prosecution and similar happenings are categorized as personal injury.
The personal umbrella policy pledges you financial protection against claims and lawsuits wherein you are sued for being the cause of (even though unintentionally) someone else's physical or mental suffering (including bodily injury and damage of property).
No liability coverage is provided for damages from asbestos/lead exposures, pollution or for the transmission of communicable diseases. You will neither enjoy any protection against any kind of discrimination or against warfare. Damages for sexual abuse or for workers' exploitation are not entertained under the umbrella policy. Other exclusions include coverage for intentional/illegal acts as well as claims for accidents/incidents taking place before the policy becomes valid.
For liability coverage/protection in any one of the above cases, you will need to make special request through your application. Your representative will take care of the rest, arranging a policy (with adequate coverage) if at all possible.
Why Do You Need A Personal Umbrella Policy?
As stressed earlier, a personal umbrella policy protects you against catastrophic claims and lawsuits that are not covered under the basic policies. These involve court proceedings amounting to millions of dollars (USD).
Not having a personal umbrella policy in such cases will amount to firstly surrendering and later loss of your home, vehicles and boating commodities, jewelry and other possessions. You may also have to pay a part of your salary to a successful claimant for years. And since the personal liability insurance covers you for more that merely paying for the damages : all the expenses you will need to defend self, including lawyer's fees and other court costs; you can survive a lawsuit without incurring devastating liability loss.
Personal umbrella policies are gaining in popularity. Once, only the well-to-do section of the society used to go for this coverage. Today, however, even the middle-class people are playing it safe by seeking protection under the personal umbrella policy. The litigious climate of the present times, wherein lawsuits suing people for reimbursements have become very common, purchasing this personal insurance policy has become a necessity.
Get yourself a personal umbrella policy if you happen to match the following:
- You own property and/or have assets that are worth more than the liability limits covered by your basic policies, you may consider an umbrella or excess liability policy.
- You have high profile career or have sizeable earnings.
- You are required to travel extensively.
- You own a farm/ranch or waterfront property.
- You live in affluent neighborhood.
- You own an aircraft or watercraft.
- You have a swimming pool in your premises.
- You have frequent visitors.
- You have one/more inexperienced, young drivers as protege.
How To Qualify For A Personal Umbrella Policy?
As with coverage amount, the basic requirement to qualify for a personal umbrella policy differs from company to company. However, in most cases you are required to carry "a definite amount of liability on your auto insurance policy or home insurance policy". Failing this criterion, you will have to bear personal liability for the difference between the liability limit you should have carried in the form of auto/home insurance and the limit covered by the umbrella policy.
Policy costs vary; however, it is never exorbitant. The price of a $1 million personal umbrella policy is something between $150 and $300 per year. Compare prices while purchasing a policy. You will be eligible for discounts if you buy the personal umbrella policy from your various basic insurance providers. ------------------------------------------------------------------------------------------------------If you are a business owner get listed at Best Insurance Site, part of Localwin Network.