Most personal insurance policies provide liability coverage to protect you if you are sued following an injury, you are responsible, either bodily harm or injury. Lawsuits can come from motor vehicle accidents, boating accidents, slip and falls, libel, slander, etc. I discussed the importance of liability coverage in previous posts, but what happens when the liability on your car, boat, or home insurance policy does enough to satisfy a judgment against you t? If you wear a Personal Umbrella policy, you potentially have a cover for the amount of the judgment above your normal limits that would otherwise be out of your own pocket.
What is a Personal Umbrella policy you ask? It is a policy of excess liability beyond your personal insurance policies. As an "umbrella" to protect you from the proverbial rainy day, this policy is specifically designed to provide additional liability insurance for event coverage on your primary policies (auto, home, boat, fire house, etc.) is simply not enough to satisfy a judgment against you.
Here's an example ... let's say you are at fault in a car accident and have coverage for bodily injury with a limit of $ 250,000 per person / $ 500,000 per accident. You are sued by the injured party and the judgment is $ 1,000,000. Your car insurance policy will cover $ 250,000 of the judgment. The remaining $ 750,000 will be paid by other means, such as a lien on your house (if you have one), wage garnishment, etc., unless you have a personal political Umbrella. If you have a Personal Umbrella policy with a limit of $ 1 million, then this policy will kick in after your auto insurance policy is exhausted and cover the remaining $ 750,000.
There are certain requirements that you must meet to buy a personal political Umbrella. The largest of these requirements is the minimum liability coverage that you must perform on all of your underlying policies. Most carriers require that you wear no less than $ 250,000 per person / $ 500,000 per accident on all automobile policies. domestic policies are usually required to have at least $ 300,000 in liability coverage. Boats and recreational vehicles are required to be insured and will also perform similar limits on policies with the policies of the auto and home. Another requirement is good behavior. Insurance companies will focus on the driving experience and driving record of those covered on the policy, and can raise their rates or outright deny coverage based on these factors.
Personal Umbrella policies can be purchased in increments of $ 1,000,000 and are relatively inexpensive. Prices vary depending on the amount of risk being hedged. Houses, cars, boats and recreational vehicles more you have, the higher the premium will be.
You should contact your insurance agent for more information on personal political Umbrella and see if you are eligible for. Anyone can be sued and be without adequate liability coverage can be financially devastating.
Have you ever been in a situation where coverage on your policy does not cover a judgment against you?
covers here are described in the most general terms, and subject to the conditions and actual policy exclusions. For the actual wording cover, conditions and exclusions, see the policy or contact your agent.
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