Personal Umbrella Protection (PUP)
Does the idea of being involved in a lawsuit scare you? In today’s world, you must protect your assets to the best of your ability and affordability. Buying enough liability coverage to cover your families assets is key to having your wealth insulated the best you can. A Personal Umbrella Protection policy, (PUP,) can help you achieve this overall liability protection.
Imagine you have a friend over to your home, they slip and fall? Imagine your neighbor’s child comes through your unlocked gate and falls in the pool and drowns? What if you are pushing your shopping cart through the grocery store and accidentally hit an elderly lady who falls and breaks a hip? What happens if you are on a hunting trip and accidentally catch a person in cross fire? (remember Vice President Cheney?) Many other examples exist, but the most common example you probably believe you already have covered. What happens if you are involved in an auto accident that the damages exceed the coverage on your auto policy? What happens then? Typically, these scenarios are going to involve excess liability insurance under a PUP policy if you have it. After the homeowners or auto insurance liability coverage is depleted, then the PUP policy would “kick in” for the remainder of the damages and up to the limit of the PUP policy.
Since this coverage is an “umbrella” over your other underlying coverages on your home, auto, boat, RV, Jetski etc., you will be required by most companies to have those underlying policies under their care. If a company is going to give you “overall” protection, they want to be, and you want them to be, the company that provides the “underlying” protection as well. Often the company will require you to have higher limits of liability on the underlying policies. For example, on the homeowners insurance policy, you maybe required to increase the minimum $100,000 in liability protection to $300,000 or more.
Typically, these type of lawsuits come as a result of negligence on the part of you or one of your resident family members defined in the policy terms. Yes, this will even cover your teenager who is accused of libel or slander and ends up in a lawsuit. But, if you or your teenager is caught in the commission of a crime, the PUP policy offers no coverage. Repeat: There is no coverage for criminal activity of any kind.
The PUP policy usually comes in the amount of at least 1 million dollars. Some companies offer higher limits usually in increments of 1 million dollars. Determining how much coverage you need is a conversation you need to have with your personal insurance agent. They will be able to help you determine the proper amount of coverage based on the risk you have and the assets you wish to protect. Someone who has more than 1 car, a pool, a boat, jetski’s, a trampoline, carpools other kids, or even is a volunteer should probably have higher limits of coverage offered by a PUP.
The good news is a Personal Umbrella Policy typically is not an expensive policy to purchase. Consult your agent and find out if you meet your companies requirements to buy a policy. Then evaluate how much you need. As always, if you need help or advice, please call The East Cooper Insurance Agency in Charleston SC for help. We have agents that are 100% dedicated to client services and helping you understand the products we sell and you are buying.
Another worthy article on this subject can be found at http://personalinsure.about.com/cs/umbrella/a/aa110503a.htm
Philip L. Bradley is the CEO The East Cooper Insurance Agency in Charleston, SC. He is licensed in SC for Property and Casualty, Life and Health. He is also a Personal Financial Representative.
www.insuranceofcharleston.com
Please consult your personal insurance agent, financial adviser and legal adviser before making any decisions regarding your personal financial or insurance situation.
