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What is personal umbrella coverage? Do I need umbrella insurance?

Personal Umbrella Coverage

It’s called a personal umbrella policy because it covers over the top of your personal autos, homes and recreational vehicles such as boats, motorcycles, snowmobiles, travel trailers and motorhomes.  Umbrella insurance covers in addition to your underlying, personal liability insurance .  Sometimes it is also referred to as excess liability insurance.

A personal umbrella policy gives you an extra layer of liability insurance, generally purchased in increments of $1,000,000.  In addition to giving you higher limits of liability coverage,  in many instances it covers things that are NOT COVERED by your primary, underlying insurance.

But, does it cover everything?  Does it mean I am fully covered?

No, there is no such thing as FULL coverage insurance that covers EVERYTHING!   Many people are confused by the term FULL coverage and think that means there will be no out of pocket costs or exclusions.  While an umbrella policy gives you additional liability coverage that your underlying policies may exclude, there are still things that are not covered by an umbrella policy.

Here are a few common things that are not covered on an umbrella policy:

Personal Umbrella Insurance will NOT cover punitive damages.  Punitive damages are awarded in a lawsuit for outrageous or reckless conduct, as determined by a judge or jury.

A personal umbrella insurance policy also does NOT cover activities of an insured as a director or officer serving as a member on a board of directors UNLESS the business or association is a non-profit AND you do not receive any compensation for serving on the board.

Some other exclusions include, but may not be limited to:

-Aircraft

-Injury to an insured (someone on your own policy)

-Professional Services, such as malpractice, errors & omissions, lawyers, doctors, insurance agents, financial planners, real estate agents

-Intentional Acts.  If you harm or injure another person intentionally, no coverage applies.  This does not include self defense.

-War

-Nuclear

-Pollution

-Business

So what is covered and is a personal umbrella insurance policy right for me?  The advice of a professional agent can best help you determine what type of coverage fits your individual situation.  For additional helpful information about personal umbrella insurance, to find out if a personal umbrella is right for you or to review your current insurance, please call us at (248)656-1655.

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