A great quick read on some key things to look for when building your personal-umbrella insurance.

Personal umbrella policies can provide additional liability coverage to protect your assets in the event of a lawsuit. While not required, it can be a smart investment for anyone looking for additional protection. However, it’s important to avoid making these huge mistakes when purchasing liability insurance.

Mistake #1: Failing to Meet Underlying Coverage Requirements

One of the most important things to keep in mind when purchasing a personal umbrella policy is to make sure that your underlying coverage for home, auto, and other policies meets the requirements set forth in the umbrella policy. This is particularly important if your personal liability policy is provided by a carrier that is different from the carrier for any of your underlying programs. To avoid jeopardizing your coverage, make sure to maintain certain minimum limits of liability on the underlying policies and ensure that the underlying insurance is obtained with a carrier that has a certain financial rating provided by companies like AM Best.

Mistake #2: Not Purchasing Enough Coverage

Personal umbrella coverage premiums can be very reasonable, and it’s critical to consider your net worth and a multiple of your future earnings among other factors when deciding how much to purchase. Failure to purchase an appropriate amount can put your assets at risk in the event of a lawsuit.

Mistake #3: Not Including Uninsured and Underinsured Motorist Coverage

Including uninsured and underinsured motorist coverage in your personal umbrella policy is important because it provides an extra layer of protection for you and your assets in case you are involved in an accident with an uninsured or underinsured driver. Without this, you may be left to cover the costs of the accident and any resulting damages out of your own pocket.

Mistake #4: Not Understanding What The Policy Covers

Another common mistake is not understanding what you have in the first place. Some policies follow the form of the underlying insurance, while others broaden coverages or fill in gaps in coverage. It is important to understand your underlying policy and what it covers and also to carefully read and understand the terms of your umbrella.  For example, some personal umbrella policies may not provide coverage for certain types of claims, such as those arising from intentional acts or related to business activities. Additionally, some programs may have specific exclusions for various claims like those related to dog bites or swimming pool accidents.

Mistake #5: Not Understanding the Difference Between Primary and Excess Policies

It’s important to understand the difference between primary and excess policies when purchasing a personal umbrella policy. Primary policies provide coverage first in the event of a loss, while excess policies provide additional coverage once the primary policy limits have been exhausted. It’s important to understand which type of policy you are purchasing and how it interacts with your other coverage.

Mistake #6: Not consulting a legal and financial advisor

Before making a final decision on purchasing a personal umbrella policy, it is important to consult with a legal and financial advisor. A legal advisor can help you understand your liability risks and how to protect yourself and your assets, while a financial advisor can help you determine the appropriate amount of coverage based on your net worth and other factors.

Talk to Notable Risk about Personal Umbrella Insurance

Don’t make the mistake of assuming that you have enough liability coverage to protect yourself and your assets. Talk to Notable Risk about purchasing a personal umbrella policy that provides the liability protection you need.  We can help you build smart and reliable coverage.

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