River Valley Insurance Agency Inc Blog
On a daily basis I am asked pretty much the same questions:
Unfortunately, many people do not fully understand the basics of insurance. This includes: the underlying reason for having insurance (to protect your assets against catastrophic events), liability limits, coverage areas, and covered perils (specific event, causing a loss and giving rise to risk).
In this blog I am going to write about the last question. “Is a person at risk if they have more assets than liability coverage?” The answer is yes.
Fortunately, there is a policy that offers an additional layer of personal liability protection coverage called a Personal Liability Umbrella. A Personal Liability Umbrella Policy extends liability protection on top of an individual’s underlying polices. The umbrella can cover you (or covered family member) for damages you may be liable for.
Umbrellas can provide additional coverage for auto, home, as well as recreational vehicles. This can also include coverage for liability claims not normally covered under your home policy such as slander/libel as well as coverage if the policy holder is a member of a volunteer board.
Here is a real life example of how a Personal Liability Umbrella Policy could have helped an insured.
The insured has an auto and homeowners policy and also owns an ATV. The insured’s son and his friend take the ATV off his immediate property and onto state land for some legal off-road enjoyment. While riding on the state land, the homeowner’s son gets into an accident and hurts the passenger. The friend’s family is now suing for damages.
In this situation the ATV was not specifically listed on the homeowners policy, was not covered under a separate policy and the insured did not have a Personal Liability Umbrella Policy. The ATV is not covered for liability in this situation. So the damages that the injured friend’s family is seeking would not be covered under the current policy.
If the owner of the ATV would have had a Personal Umbrella Policy, he would have been covered up to the policy limit in this situation.
So can you afford and umbrella? The real question is, can you NOT afford to have one?
Umbrella Policies start at about $10-$15 a month for $1M in excess coverage.
As always a little disclaimer; each policy holder’s circumstance is different and you should seek the advice of a licensed agent prior to making decisions on your policy and coverage.
For more information about Personal Liability Umbrella Policies, contact us at 616.301.9500 or firstname.lastname@example.org.