Excess UMUIM

That could never happen to me, right?

For the first 30 years of my career, we have had insureds involved in serious accidents. Some paid the total amount of liability coverage under the policy. In those cases, it was $300,000 or $500,000. There was one loss, from about 10 years ago, that the total paid out for our insured was $4.5 million. Fortunately, they had a great insurance professional who made sure they had a liability umbrella and they were protected. But, how much is enough? If the judgment from 10 years ago was worth $4.5 million, how much would that settlement cost today?

In the last 5 years, the amount of litigation from car accidents and slip-and-falls has increased dramatically. At this time, we have 3 different claims where the demand is in excess of the policy limits even with a liability umbrella. The largest demand is $8 million. Most liability umbrellas have a maximum level of protection of $5 million. What is you want more coverage than that? You can buy what is called an excess umbrella. It is an additional policy designed to pay after your house or car policy, and umbrella have paid.

Buying liability coverage is one of the easiest decisions anyone can make. How much is enough? Buy what you can afford but understand that there could always be a claim in excess of your coverage. Run into a school bus and injury 42 children, the $500,000 of coverage you have on our auto policy will not be enough. Even if you had an additional $1 million, you still would not have sufficient protection.

The average cost of a $5 million policy for 2 cars, 2 drivers, and a house is about $600. The cost for the additional excess umbrella costs about $150 for each additional $1 million of protection. Ask your insurance professional to review all of your liability exposures and coverage options. Need an insurance professional? Call us at 610-933-4950.