The Importance of a Personal Umbrella Policy

Smart Insurance Tips

For financially successful individuals, safeguarding your wealth and assets is paramount. One of the most important aspects of your personal insurance is an umbrella policy. Your primary policies – such as homeowner, auto, or boat – provide the first layer of liability protection. However, if you’re sued due to a major accident, the liability limits of those policies could be inadequate. A personal umbrella policy provides a second layer of coverage that protects you from lawsuits due to bodily injury or property damage that you may have caused to another party. Without this coverage, your personal assets could be at risk. 

Here are a few important tips:

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1. Individuals with higher net worth and/or greater risk factors typically need higher coverage limits.
2. Coverage limits can be purchased for a minimum of $1M up to $50M+. Umbrella premiums for high limits of coverage are surprisingly affordable. 
3. Liability risk factors include renting out one’s home, home construction, young or elderly household drivers, speed boats, pets, and frequent entertaining at home. 
4. Legal defense costs are typically included, outside of the coverage limits purchased on your policy. 
5. Your insurance broker can customize an umbrella policy with the right level of coverage, based on personal net worth, lifestyle and risk tolerance.
6. Many personal umbrella policies provide worldwide coverage. 

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