Personal Excess Liability Insurance (also referred to as Umbrella Insurance) may be one of the most overlooked products by high net worth individuals and families. Because of this many clients are potentially exposed to substantial financial loss. Perhaps you have umbrella/excess liability coverage but don’t understand how it works. Has it ever crossed your mind that you could have a claim or be brought into a lawsuit that would exceed your available limits?
Why Your Homeowners or Auto Insurance Policies Aren’t Enough
From years of experience working with high net worth families, I find that too often one’s personal assets are drastically underinsured. While you may carry liability on policies such as home, renters, auto, boat, etc., they are limited and only apply to claims covered under that individual policy. If you were to be sued for a trip -and fall injury on your property and the settlement was greater than the limit on your homeowner’s insurance, you’ll be paying out of pocket for the difference.
An umbrella policy will provide excess or extended liability over all of your individual insurance policies.
What to Consider When Determining Limits
- What assets do you need to protect?
- What is your personal net worth?
- Do you own or operate a business?
- Do you have young drivers?
- Do you have household employees?
- Are you vulnerable to a costly law suit?
Depending on your answers to these questions and the value of your assets, you may require substantial excess coverage. If you need assistance determining your umbrella limit, let’s talk!
Q: What do I need to provide my broker with to obtain a quote?
A: Insurance companies require that you provide them with proof of coverage for all of your underlying policies. This includes all properties, automobiles, recreational or watercraft vehicles, and any insurance policy that includes personal liability.
Q: How much does an Umbrella policy cost?
A: Umbrella insurance is rated based on numerous factors, such as the amount of coverage, your loss history, the loss history of other household members, and more. While a smaller policy with no claims history can be very affordable, if you have had multiple losses or need more coverage, you could be paying more than expected. Number of residences, number (missing rest of sentence here?)
Q: What are some examples of claims that are covered by an Umbrella policy?
A: Examples include:
– a guest at your home falls and becomes injured
– an automobile accident
– a lawsuit for defamation
– your child is involved in cyber-bullying and is brought into a lawsuit
As a high net worth individual, the financial consequences of being sued can be very serious. Leaving yourself or your family unprotected could compromise your financial status and lifestyle. Call me today to discuss your coverage and determine your needs.
Opinions expressed in this article are solely the author’s opinion, not intended to provide the reader with legal or any other professional advice. Should you need advice or opinion, consult with a qualified professional to address your specific needs.