The personal umbrella policy may well be one of the most misunderstood personal insurance products. For example, anyone who is a dog owner has good reason to get under an umbrella. One of the biggest increases in homeowner-liability claims comes from dog bites.
Case in point: Last fall, an insurance carrier paid a settlement of $500,000 for a 2010 dog bite case in Pennsylvania. In addition to dog bites, other somewhat ordinary mishaps such as auto accidents could turn ugly, leaving people in a financial lurch.
Here’s a look at some of the most pervasive myths about personal umbrella coverage:
- Umbrellas are only for the rich. Only someone with absolutely nothing to protect can go umbrella-free. Anyone owning a home, car, boat, RV, snowmobile, swimming pool, or having a dog, teen drivers, a retirement account or sizeable assets, is a candidate for an umbrella policy.
- Umbrellas cost a lot. Actually, the personal umbrella is one of the most inexpensive insurance products one can purchase. Umbrella liability coverage generally costs between $200 and $300 annually for a $1 million limit.
- Home and auto insurance limits are high enough for any eventuality. Society is litigious and defense is expensive. Often it doesn’t take a big claim to exhaust the limits of a policy.
- If another driver causes an accident, that driver will pay for my car and medical bills. By industry estimates, up to 20 percent of drivers today are uninsured. Many more only purchase state minimum coverage. If a driver is underinsured, or worse, uninsured, who do you think pays? Be sure the umbrella coverage you sell includes uninsured and underinsured motorist coverage (it’s not a given).
Many standard market carriers will only write an umbrella over their own policies. At Burns & Wilcox, we have access to carriers who will write over multiple insurance carriers. We also can, and often do, provide very high limits: $10 million and upwards. Umbrellas are high-touch, low-profit items, so it makes sense for the insurance agent to have a wholesale broker work on it. What’s more, Burns & Wilcox is fast, often securing quotes for several different policy limits in five minutes.