An inadvertent collision on the ski slopes, a freak diving accident in your pool, a car accident - each of these scenarios could trigger a liability loss.  What happens if you are sued for more than you are covered for? 

Accidents happen and people can and will file lawsuits.  That is what insurance is for.  But all policies have limits.  When you reach your policy limit all your personal assets  (savings, retirement, real estate) are fair game.    That is why we always stress the importance of the Personal Umbrella Coverage.

What is it?

The Personal Umbrella provides additional liability coverage over and above your existing auto, home and boat coverage.  Coverage starts at $1 million dollars with additional limits available in million dollar increments.  Average cost is $180-$200 for people with one house and two cars.

Who Needs it?

Unless you are a student with no money to put gas in your car, you should have an umbrella.  As a rule of thumb, people generally get umbrella coverage when they purchase their first house.

How Much Coverage Should I Get?

Scary to say, but $1 million dollars does not go that far when someone is permanently disabled or there is a fatality.  So how much is enough?  In the end it's a personal choice, but there are some factors to consider:

Total Assets At Risk - this would include property, savings, retirement, stocks and bonds, and future wages.

Additional Risk Factors - anything about your profile that creates increased risk including swimming pools, youthful drivers, toys (boats, jet skis, ATV's, snowmobiles), rental properties, Facebook users.

The Zip Code Factor - if you live in a town that is considered a wealthy community it is often assumed that you have money and makes you an easier target for a lawsuit.

Do yourself a favor and review these two links.  The first is to our website that provides a description of coverage and some claims examples.  The second is to a great article that gives more examples on unexpected loss scenarios.  

 Detailed Description and Claims Examples

 Should You Seek Out Umbrella Insurance?

Be informed so you can make the right decisions about your insurance program.

Regards,

Edward P. Hackett, CIC CRM

Vice-President