Why You Need a Personal Umbrella Policy

Personal Umbrella Policies are growing in popularity. In the past, only wealthy individuals and their families purchased this coverage. Today, middle-income families may also procure this policy for protection in our society’s increasingly litigious climate. As the tendency to sue for damages rises and awards granted by the courts grow, the Personal Umbrella Policy is increasingly seen as an insurance necessity rather than a luxury. It is especially attractive because of its relatively low cost.

In particular, people with specific characteristics or who engage in certain activities have a higher-than-average need for a personal umbrella policy. These situations include the following.

• Your total assets are more significant than your underlying liability limits.
• You are financially responsible for the actions of a young, inexperienced driver.
• You live in an exclusive and affluent neighborhood.
• You have a high-profile career or high income.
• You frequently host guests on your property.
• Your residence includes a swimming pool.
• You own waterfront property, a farm, or a ranch.
• You own watercraft, aircraft, or off-road vehicles.
• You own numerous rental properties.
• You engage in extensive international travel for pleasure.

Indeed, one could argue that a lower-income person needs an umbrella policy. Consider an apartment dweller who inadvertently starts a fire while smoking in bed, and the fire damages adjoining apartments. The smoker’s liability exposure could be enormous in such a situation. So, once again, a personal umbrella policy is a wise purchase for people in nearly all income groups.

Source: International Risk Management Institute, Inc.