The Personal Liability Umbrella Policy: Protection Against a Legal Storm

“You don’t have to be a millionaire to be sued like one.”

It is an old adage that, while shocking in its delivery, is still based in reality as new lawsuits are filed for serious accidents and causing ensuing claims with insurance carriers. So how can we, millionaires or not, protect ourselves best against such a worst-case scenario? 

The Chris Bailey Agency is here to help you be smarter about your insurance. After all, the more you know, the better you can plan and protect against the unexpected.

What is a Personal Liability Umbrella Policy?

Think of an umbrella policy as a simple extension of your auto and home policies’ liability limits, as well as that of any “toys,” such as an RV, motorcycle, boat, jet ski, or snowmobile. An umbrella policy picks up coverage when your underlying policy limits are exceeded. These policies sit on top of those base amounts and usually have set standardized benefit limits of $1 Million, $2 Million, $3 Million, and so on.

Am I Eligible for a Personal Liability Umbrella Policy?

In most cases, personal liability umbrella policies require clients to have specific underlying policy liability limits, such as auto policies covering $250K (per person)/$500K (per accident)/$100K (property damage), or $300K liability on a homeowner and/or renter’s policy. It is very rare for someone to be ineligible for coverage, unless they have a pending or past legal issue.

What is Covered?

If you were to be involved in an auto or home lawsuit and found responsible for another party’s injuries and/or damages, you would likely have to pay the other party for those costs— hospitalization, medical expenses, rehab, lost wages, etc.—which can quickly become very expensive. 

Umbrella policies cover legal expenses to support the client and provide settlement up to the policy limit. Since Farmers’ (the insurance company) money is at risk when you’re sued, we’ll protect that money with our […]