Archive for the Personal Insurance Category

Why You Need a Personal Umbrella Policy

Why You Need a Personal Umbrella Policy

One of the most important insurance policies you can buy is the personal umbrella policy, but many people are unaware they need one. This policy provides high limits of liability to protect you against a catastrophic liability loss. For example, a major car accident may injure numerous people or cause head injuries or death that will result in liability far in excess of the limits typically purchased in a personal auto policy. An umbrella policy sits on top of the auto and homeowners policies to provide higher limits of protection. In addition to providing higher limits, this policy normally pays for some losses not covered by the underlying policy, such as legitimate allegations concerning libel or slander.

Personal umbrella policies are growing in popularity. In the past, only wealthy individuals and families purchased this coverage. Today, middle-income families also may 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 certain 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 greater 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 even 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.

Copyright 2014
International Risk Management Institute, Inc.

8 Things You Can Do To Keep Your Property Safe

  1. Furnaces should be inspected and serviced each fall by a licensed professional
  2. Clothes dryer vents should be kept clean, and gas clothes dryers should be inspected on an annual basis
  3. Smoke alarms should be inspected twice a year to ensure they are functioning properly
  4. Roof should be inspected on an annual basis by a qualified professional
  5. The purchase of a water detection system should be considered. These systems are designed to detect a water leak immediately
  6. The washing machine hoses should be periodically checked since these hose failures cause millions of dollars of water losses each year
  7. Burglary alarm systems should be considered, particularly for homes in high crime areas
  8. Valuable papers, coins, stamps, and related items should be stored in a safety deposit box at the bank