From time to time our Durham Personal Injury Attorneys and Greensboro Personal Injury Attorneys are asked about personal umbrella insurance. Unfortunately, we are often asked about when one of our personal injury clients have been severely injured and the at-fault driver has inadequate insurance.
Generally, if you have been injured severely and are finding out that the person who caused your injuries does not have collectible assets or does not have adequate insurance (the minimum automobile liability limits in North Carolina is $30,000 so this happens a lot), then there are two main sources for you to find additional money to compensate you for your injuries: (1) Your Underinsured Motorist Coverage on your own personal automobile policy (or the personal automobile policy of a resident-relative or (2) the Personal Umbrella Insurance Policy of the person who caused your injuries.
A personal umbrella policy provides insurance coverage after your personal auto policy liability limits or homeowner’s insurance liability limits have been used up. For example, if you have $300,000 of liability limits on your personal automobile policy, and you you have a $1,000,000 then you would have a total of $1,300,000 of liability limits if someone were to be injured in an auto accident that you caused.
From an asset protection standpoint a personal umbrella policy is a great choice. Obviously you get the additional $1,000,000 of liability protection, but the great thing is that your premium for the additional $1,000,000 of coverage will cost you less than you pay for your $30,000 of liability protection on your personal auto policy. Anytime you can pay very little money ($100-$200 per year) for a lot of coverage (starting at $1,000,000), then it is a pretty good policy.
A personal umbrella policy will add coverage to your homeowner’s insurance, to your auto insurance, and it will also add coverage where you are not currently protected (like accidental damage your kid may do to somebody else’s property, or if you are sued for slander/libel/etc.).
So, to answer the question posed in the title of this post, yes you should have an umbrella insurance policy. Our recommendation is (at a minimum) you should purchase an umbrella policy and then lower your liability limits on your homeowner’s insurance and auto insurance policy (to whatever minimum levels are required by your umbrella policy).
If you have any questions about your insurance coverage and liability limits, feel free to call our Durham Attorneys or Greensboro Attorneys for a free conversation about your insurance premiums.