Personal Umbrella Insurance

Umbrella liability coverage provides financial protection for catastrophic losses.

When you purchase a personal umbrella policy it generally provides at least $1,000,000 of additional coverage to respond to a loss arising out of the use and/or ownership of your home, your automobile(s), your watercraft, and other exposures owned and insured by you with a primary policy.

Umbrella coverage is triggered when an underlying policy such as a homeowner's policy or an auto policy pays out the maximum amount of liability coverage payable under the policy. Once that limit is exhausted the umbrella takes over. Umbrella coverage is generally affordable and often times can be purchased for less than $200.00 annually. The premiums for umbrella coverage are low because the frequency of umbrella claims is far low. However, when an umbrella loss does occur, the settlement is often severe.

Real Life Claims Example:
A Summer Barbecue Turns Into A Swimming Pool Tragedy

The Facts:

With his parent's permission, a young high school student invited a group of friends over for a summer barbecue and pool party. Although the parents allowed their son to invite friends over, they were not home at the time.

At 9:00 PM, a friend arrived, who was not familiar with the house or pool area. He was there just 20 minutes when he ran across the terrace and dove into the pool, approximately 12 feet from the shallow end. The young man hosting the party saw his friend running toward the pool, but did not warn him that he was about to dive into the shallow end.

As a result, the boy age 19 was treated for spinal cord injury. He was paralyzed below mid-chest with 80% use of one arm and 30% use of the other.

In a complaint filed in Superior Court, the young man filed suit to seek damages for: Physical and emotional injuries, Pain & suffering, Loss of enjoyment of life and Lifetime income loss

Due to the Alleged inadequate supervision, Failure to indicate the shallow and deep ends of the pool, Failure to adequately illuminate and Failure to warn, the boys parents filed suit to seek damages for: Medical costs incurred on behalf of their son and Loss of consortium for their son

The Settlement:

The claimant received a total of $2,000,000 in the settlement of this case.

The parents of the boy hosting the party had excess liability insurance in the amount of $10,000,000. Had this coverage not been in place, imagine the financial consequences of their loss.