In today’s world where lawsuits are filed in record numbers, financial advisors recommend that anyone who owns a home and/or an automobile purchase a personal umbrella or excess liability policy. Your New York homeowners and automobile policies often do not provide adequate liability coverage in the event you are involved in a significant lawsuit. You would be held personally responsible for paying any portion of the settlement that your insurance company did not pay. Your home, automobiles, savings account, retirement accounts as well as future assets could be taken from you.
A personal umbrella policy provides liability coverage that becomes effective when the underlying coverage limits provided by your other policies – homeowners, auto, boat, recreational vehicle – are exceeded. These policies provide broad coverage and include protections against certain losses not covered by these other policies. They can be thought of as extensions to your New York home and auto insurance policies.
As an example, someone slips and falls on your driveway and you do not see them and run over them with your car causing serious injury or even death. After the case is settled, damages reach $3,000,000. If the limit of liability on your auto policy is $1,000,000, you would be liable for the damages above and beyond this limit. This is where a New York personal umbrella policy will kick in and protect you from possible financial ruin.
Personal umbrella policies provide the following types of coverage:
Bodily Injury Liability – This covers the costs of damages to another person’s body. If a teenager dives into the shallow end of your pool, your dog bites a neighbor, the mailman slips and falls on the ice on your front walkway or you seriously injure someone in an auto accident that is your fault, a personal umbrella policy will cover the costs of damages and settlements in a lawsuit that exceed the liability limit of your other policies such as home and auto. It will also cover the cost of medical bills and legal expenses.
Property Damage Liability – This covers the costs of damage or loss to another person’s tangible property. Some examples would include damages to vehicles in auto accidents where you are at fault, vandalism to a home or commercial building caused by your child or damages caused by your pet, such as your dog hitting a table in your neighbor’s home and shattering a priceless vase or piece of art.
Owners of Rental Units – This helps to protect against liability that you face as a landlord. You will be covered if someone trips over a crack in the sidewalk and sustains injuries or if your tenants dog bites someone on the property and you are held liable.
Coverage is also provided for:
- Malicious prosecution
- False arrest
Most insurance agents and financial advisors recommend that your personal liability coverage should roughly equal your net worth. The cost is about $350 for every million dollars worth of coverage. It is important to review this coverage annually as your assets grow and your financial situation changes.
Other factors that may increase you need for a personal umbrella policy are the following:
- You employ a babysitter or nanny
- You have a housekeeping and gardening staff
- You have firearms in your home
- You have a pool
- You have a trampoline
- You own a dog
- You have teenage drivers
- You commute long distances to work
- You entertain frequently
A New York personal umbrella or excess liability policy will insure you against catastrophic risk that will disrupt your financial future should it occur. Berkely Brokerage Corp. will answer any questions you may have and get you set up with the right coverage for you. Give us a call today to get started. It is important to protect your family, your home and everything that you have worked so hard to attain.