Personal Umbrella Insurance in Vermont

What is a Personal Umbrella Policy?

Primary insurance policies, such as homeowners and auto policies, often offer many protections and several available limits. There’s normally a limit to how much protection one primary insurance policy can provide, though. When Vermont residents want protection beyond what a primary policy’s able to afford, a personal umbrella policy is one option that’s available.

A personal umbrella policy typically functions as a secondary liability insurance policy that supplements the protections provided by one or more primary policies. When an underlying policy’s coverage is exhausted, a supplemental umbrella policy may cover remaining costs associated with a covered liability claim.

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How Much Coverage Do Personal Umbrella Policies Provide?

Like most other types of insurance policies, how much coverage personal umbrella policies provide varies. It’s not uncommon, however, for them to provide millions of dollars worth of protection. Insurance carriers are often able to keep premiums low and still provide high limits because personal umbrella policies are a secondary form of insurance. 

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Do Personal Umbrella Insurance Policies Cover Physical Property?

Personal umbrella insurance policies don’t normally offer coverage for physical property. While policies will frequently add onto the liability limits in homeowners, auto, boat and other primary policies, they usually don’t increase protection for the item itself. This is because most primary policies can be set up to offer property coverage equal to or greater than the item being insured.

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Are Personal Umbrella or Excess Liability Policies Better?

Personal umbrella and excess liability policies are two forms of supplemental liability insurance, but they aren’t identical.

Personal umbrella policies generally come with their own terms, conditions and exclusions. As a result, they can frequently supplement more than one primary policy at a time. Sometimes, they can also fill in coverage gaps left by primary policies.

Excess liability policies tend to adopt the coverages, limits and exclusions of an underlying policy. Because of this, they typically can only supplement one policy and usually aren’t able to fill in gaps.

While the former may provide more coverage than the latter, whether a personal umbrella or excess liability policy is better is situationally dependent. Some people need the more robust protections that personal umbrella insurance offers, while others can get the coverage they need from an excess liability policy. 

Who in Vermont May Want Personal Umbrella Insurance?

Any Vermont residents who want more liability coverage than their primary policies afford might be interested in personal umbrella insurance. Often, such people either have assets they want to protect or have above-average risk exposures. Some examples of residents who might be interested in this supplemental coverage include:

  • Parents and grandparents who own family estates they eventually want to pass on

  • Wealthy individuals who fear they may become targets of opportunistic lawyers

  • Landlords who want extra protection against lawsuits that tenants may file

  • Athletes who partake in high-risk sports (e.g. contact sports, boating, etc.)

  • Professionals who offer pro-bono services that professional liability insurance doesn’t cover

What Kinds of Primary Policies Can Personal Umbrella Policies Supplement?

Personal umbrella policies can supplement many different primary policies. Some of the most common policies that residents supplement with personal umbrella coverage include:

How Can Vermont Residents Get a Personal Umbrella Policy?

Personal umbrella policies should be chosen with great care, because most have requirements that must be met by underlying policies. If requirements aren’t met, a policy’s personal umbrella coverage may be jeopardized.

For help finding a personal umbrella policy and making sure all required primary policies are in place, Vermont residents should contact an independent insurance agent who specializes in this form of insurance. A knowledgeable and independent agent will be able to determine whether a resident should purchase personal umbrella or excess liability insurance, request quotes for policies from multiple insurers and confirm all underlying policies’ coverage

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