What is a Personal Umbrella Policy?
Personal umbrella policy (PUP) provides extra liability protection over what is provided by policies that cover your auto, home, and any recreational vehicles. It carries liability limits in $1,000,000 increments. It becomes an “umbrella” of extra protection over your activities in life should you be responsible for an accident or claim.
Generally, PUPs provide two types of coverage:
- Extra liability limits above the current underlying policies of auto, home, ATV, boat and snowmobile.
- Liability protection outside, or in addition to, that provided by the underlying policies.
What does the PUP cover?
Liability coverage protects you for situations in which you are responsible for causing injury to others for:
- Bodily injury
- Property damage
- Personal injury defined as:
- Defamation of character
- Libel – written form of defamation
- Slander – verbal form of defamation
- False arrest
- Invasion of privacy
When to Consider an Umbrella Policy
Everyone has an exposure to larger claims, regardless of status in life. The probability of a bad accident involving a shoe salesman can be just as great as that of a farm worker. However, you should specifically consider a PUP when:
- You have a busy life with obligations and assets that you don’t want to lose.
- You have known risks present in your life that increase your probability of harm to others, such as young car operators, recreational vehicles, personal land ownership beyond a standard house lot, a pool or other “toys” at home.
- Your underlying policies do not meet the wrongful death statutory limits of where you live, travel, work and play. In Maine, the wrongful death statutory limit is $750,000.
- You are an active member of the community and are involved in leadership of non-profit organizations. This increases your exposure to the risks of a claim. Please note that umbrella coverage is not a replacement for “Directors & Officers Liability.”
- You sense a moral obligation should you be “at fault” in a situation which causes harm to others and you lack the ability to compensate them fairly for those damages.
- You desire peace of mind, knowing you are better protected because sometimes we simply can’t predict risks present in our lives.
What is Excluded on a PUP?
All PUPs have some typical exclusions such as:
- No coverage for workers’ compensation
- Damage to property owned by others in your care, custody and control
- Liability for rendering professional services
- Those exclusions found in the underlying policies
How Much Does a PUP cost?
PUPs are relatively inexpensive compared to the overall cost of insurance. Every customer is rated for their unique exposures covered by their underlying policies. However, the typical household with one single family home, two cars and one youthful operator would pay approximately $195 per year for the first $1,000,000 limit. Additional “layers” or limits can be purchased with most insurers.