How to Determine If You Need a Personal Umbrella Policy

A personal umbrella policy is an extra layer of liability protection. It helps to protect your family and assets in the event of a large lawsuit. Read below for 3 tips on how to determine if you need a personal umbrella policy.

Instructions

1. Evaluate your personal situation. Do you have a teenage driver? Do you own your home? Do you like to throw parties and have guests over? Do you have a pool? If you answered yes to any of these questions and have any significant assets or a retirement fund, I would highly recommend purchasing a personal umbrella policy. ---Imagine your teenager accidentally runs a red light and hits another vehicle causing the driver of the other vehicle to be paralyzed for life, his family sues you and gets a judgment for $750,000, the limit of your automobile policy is $300,000...what now? You are now personally responsible for the remaining $450,000...there goes your house, savings and retirement fund...unless you have a personal umbrella policy.

2. You should also consider purchasing a personal umbrella policy if you have a high profile career or sit on the board of a civic, charitable or religious organization (unlike a homeowners policy, personal umbrella policies provide coverage for personal injury suits resulting from libel, slander, defamation, false arrest, etc...)

3. Finally, lawsuits are costly. A personal umbrella policy can provide coverage for legal expenses such as attorneys' fees and court costs (provided it is a covered claim under your umbrella policy) that may not be covered under your automobile or homeowners policy.

Tips & Warnings

• Be a smart consumer. Sit down with your insurance agent and discuss any questions you may have about a personal umbrella policy.