If you enjoy having people over to your house for cookouts, dinner parties or just sitting around the bonfire, you need a personal umbrella insurance policy.
Why? Because 9 times out of 10, an adult party usually contains an alcohol component. I’m no different- I enjoy a few beers or a few glasses of wine. And yes, there have been occasions when I’ve overindulged.
If you’re at your own house, no worries. You don’t have to drive, just crawl into your bed.
But what about your guests?
You do the math: the more people at your party, the greater the chance someone will overindulge and drive home. And get into a car accident.
And guess who gets brought into the lawsuit? I guarantee that when the lawsuit is presented (and it’s not a question of if, it’s when), you’ll be named. Why? Because you hosted the party. The reason Joe Blow T-boned the other car is because he was lit like a firecracker. And where did the alcohol consumption take place? Your house. You don’t even have to provide the alcohol, just the venue. Yep- he brought his own booze, but you provided the opportunity.
When the accident happens, personal umbrella insurance becomes your best friend.
And if it’s a particularly bad accident (think fatal crash), you’ll never be so thankful for the umbrella policy.
Here’s what personal umbrella insurance is and how it works
Personal umbrella insurance is simply a $1 million liability policy (liability pays for bodily injury or property damage to others). It sits and waits until one of the underlying policies is maxed out. The most common underlying policies are your car and home insurance policies. Here’s a hypothetical situation using my own policies:
My homeowners policy has a $300,000 liability limit. I host a killer shindig and my best friend has a few too many. She gets into her car and promptly runs a red light and kills another driver. Let’s say that my homeowners policy pays the $300,000 (very safe assumption). The settlement is $600,000. Where does the remaining $300,000 come from?
You guessed it: My personal umbrella insurance.
But, what if it turns out you’re NOT responsible for the accident?
Problem is, you’ll go broke paying the legal bills to prove it’s not. The umbrella policy’s most awesome feature is the legal representation it provides. Yep- you get an attorney to defend the suit. Even if it ends up being groundless or you’re not at fault, your legal bills get paid. That’s pure gold to me. And it should be to you too.
Other examples of eligible underlying insurance policies
- Motorcycle insurance
- Boat insurance
- RV/camper insurance
- Rental properties
- Second residence/vacation property
Cost for personal umbrella insurance? Pretty stinking cheap considering what you’re getting.
Back to me- my personal umbrella insurance is $1 million coverage. That’s the minimum policy amount. You can increase by increments of $1 million for additional premium. In my case, here’s what my umbrella covers and what it costs me:
- 2 vehicles
- 2 motorcycles
- Primary residence
- 2 parcels of land with buildings
Annual premium? $251.00. That’s 69 cents a day. Or $4.83 a week. Hmmm.
I always say the personal umbrella is the best money you can get for your insurance dollar. And to those who respond, “But that’s wasted money- you’ll never get your money back”, I respond, “Good! I don’t want my money back!” Because that means something horrible has happened. And I don’t wish that on anyone.
And if you do “get your money back?” Well, I’d wager a guess that $1,000,000 for $251 is a pretty damn good return on investment……