Most Professionals and individuals of high net worth seek Umbrella Protection. Umbrellas come in two designs; Personal and Commercial. Personal Umbrella Policies are referred to as PUPs and Commercial Umbrella Policies are commonly referred to as CUPs. Umbrella policies are either Personal or Commercial and do not cross over; the PUP is designed to act as Excess Liability Insurance to the listed and underlying Personal Lines Policies which are typically Homeowners, Landlords & Auto policies.
With Personal Lines carriers, it is common to require both the Auto and Home Insurance to be underwritten by the same carrier in order to offer a Personal Umbrella Policy. Many people these days have their Auto and Home with separate carriers either because of premium or due to underwriting issues which may disqualify one or the other; in this case, a Stand Alone Umbrella is needed.
Few insurance carriers underwrite a Stand Alone Personal Umbrella Policy; stand alone meaning without the requirement of purchasing any other coverage. HOWEVER, please do note that if you purchase a stand alone umbrella policy, the carrier will not be monitoring changes to your underlying policies. Any changes to the underlying policies must be relayed to the Personal Umbrella Carrier in order to keep the policy reflective of the underlying coverage.
Although Personal Umbrella Policies offer coverage as needed between $1 Million & $5 Million limits (in $1 Million increments), the Underlying Auto Liability must carry a minimum of $250,000 Bodily Injury Per Person, $500,000 Bodily Injury Per Occurrence, and $100,000 Property Damage; in addition, each underlying Homeowners or Landlords policy must carry a minimum $300,000 Personal Liability. Thus if someone is interested in an Umbrella Policy, he/she would start with making sure the underlying policies have sufficient coverage.
With a solid carrier behind these policies and today’s modern technology, same day coverage is available. A copy of the underlying policies will be required along with each individual’s driver’s license who will require coverage; a quote will be generated and if interested, the policy may be bound effective the same day. This short article is very general and only for basic informational purposes, there are many rules and regulations which vary from state to state and we invite you to make sure all your questions are answered before any further decision.