Umbrella Insurance

What is umbrella insurance?

If you see the words “Excess Liability Policy” anywhere, that’s the same thing. It kicks in when the limit on the underlying policy is reached.

If you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage, paying for judgments against you and your attorney's fees, up to a limit set in the policy. An umbrella personal liability policy kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condominium and auto policy. It will also cover you for things such as libel and slander. Personal Umbrella Coverage (PUP) is an extra policy that offers significant protection against liability claims or lawsuits for serious personal injury.

For example, if your homeowners insurance policy has a $500,000 liability limit, but a catastrophic accident occurs and you are responsible for $1 million in property damage, legal fees, and medical bills, a PUP can cover the remaining $500,000.

Consider a PUP if you:

• Have a young driver on your auto policy: teens are statistically the riskiest drivers on the road, with a crash rate three times that of drivers age 20 and older.
• Own a swimming pool or hot tub: pools with slides or diving boards can also significantly increase your risk of an accident.
• Participate in recreational sports or operate recreational vehicles: water sports, snow skiing, and boating can all increase the likelihood of an accident for which you may be liable. Owning watercraft, a recreational vehicle, or a motorcycle can also increase your risk.
• Own rental property: if you own a vacation home or other rental property, consider a PUP to protect yourself and your assets.

To purchase a AAA PUP you must have both your auto and home insurance policies with AAA —and there may be other restrictions. A PUP offers a lot of coverage at an affordable rate. If you think this kind of coverage may be right for you, discuss it with your insurance agent.