A personal umbrella policy with UIM (Uninsured Motorist) UM (Underinsured Motorist) coverage is a type of insurance that provides an extra layer of protection against unexpected expenses.
This policy can help pay for damages or injuries that exceed the limits of your primary auto insurance policy, including medical expenses, lost wages, and property damage.
UIM UM coverage can also help protect your assets in case you're involved in an accident with someone who doesn't have enough insurance to cover the damages.
By having a personal umbrella policy, you can have peace of mind knowing that you're protected against unexpected financial burdens.
Recommended read: Does a Liability Only Auto Policy Need Uninsured Motorist Coverage
What Is UM?
Uninsured Motorist (UM) coverage is a must-have for anyone who wants to protect themselves from financial ruin in the event of an accident caused by a driver with no insurance.
UM coverage kicks in when the responsible party doesn't carry auto liability insurance, leaving you with a hefty bill for medical expenses or car repairs.
Here are the key components of UM coverage:
- Uninsured/Underinsured Bodily Injury Coverage: pays for medical bills, pain and suffering, and lost wages.
- Uninsured/Underinsured Property Damage Coverage: pays for car damages, including property damages like your driveway or fences.
If you're involved in a hit-and-run accident, UM coverage can help you recover the costs of your medical expenses or car repairs, even if the other driver flees the scene.
In short, UM coverage is a vital part of any personal umbrella policy, providing financial protection in the event of an accident caused by a driver with no insurance.
Do I Need a Policy?
You might think only wealthy people need a personal umbrella policy, but that's not true. The risks are real and can affect anyone.
If you already have liability protection on your auto and home insurance, you might wonder if you really need an umbrella policy too. The answer is yes, you do.
A wrongful death occurs when the death of an innocent person is caused by the negligence or misconduct of another person. Under Wisconsin law, the maximum wrongful death award is $350,000 for an adult and $500,000 for a minor child.
Broaden your view: Death Insurance Policies
Even if you carry the highest liability limits on your auto and home insurance, you're still exposed to a possible loss that may exceed the liability limits of your policy. This means your assets and future earnings could be at risk.
Your umbrella insurance policy should come with uninsured and underinsured coverage to protect you from motorists with no insurance or minimum liability limits.
Benefits and Exclusions
A personal umbrella policy with UIM/UM coverage offers numerous benefits, including increased insurance coverage beyond the limits of your home and auto insurance, which can be as low as a few hundred dollars a year.
It provides coverage for legal expenses, including defense costs and attorney fees, which can be a significant financial burden.
This extra protection can shield you from liabilities that are part of your home insurance, such as property damage or injuries to others.
Here are some exclusions to be aware of:
- Injury or property damage which is intended by the insured
- Business or professional activities
- Illegal activities
- Loss or damage due to war
- Liability incurred through contractual agreements
- Injuries caused by the use of recreational vehicles
Benefits of a Policy
A personal umbrella policy provides you with extra protection against financial losses due to injuries or property damage caused by others. This type of policy can increase insurance coverage beyond the limits of your home and auto insurance.
With an umbrella policy, you can enjoy inexpensive protection against injury and property damage. It can also cover legal expenses, including defense costs and attorney fees. This is especially helpful if you're at fault in a car accident and the other driver and passengers all needed medical attention or worse, death.
The benefits of having a personal umbrella policy are numerous. For instance, it can protect you from liabilities that are part of your home insurance, such as accidents on your property.
Here are some key benefits of a personal umbrella policy:
- Increases insurance coverage beyond the limits of your home and auto insurance
- Covers legal expenses, including defense costs and attorney fees
- Protects you from liabilities that are part of your home insurance
Additionally, a personal umbrella policy can provide you with $1 million to $5 million in additional insurance coverage. This extra layer of protection can give you peace of mind, knowing that you're covered in case of an unexpected event.
For more insights, see: 2 Million Umbrella Policy
Policy Coverage for Uninsured Motorists
An uninsured motorist means that the other person you are in an accident with has no auto insurance, leaving you to pay for your own car repair or medical bills if you get injured.
You can protect yourself with Uninsured Motorist (UM) coverage, which kicks in when the responsible party liable for the accident doesn't carry auto liability insurance and they've injured you or damaged your automobile.
To add this protection, you must carry UM/UIM limits of $250,000/$500,000 on your auto insurance policy.
Having UM/UIM coverage can increase the protection provided by your auto policy by the stated limit of your personal umbrella liability policy.
Mutual Assurance offers UM/UIM coverage in their personal umbrella policy at a limit of $1,000,000, requiring an underlying UM/UIM limit of $500,000 with your auto policy.
The cost of this additional coverage is $150 for the first car and $50 for each additional vehicle.
Here are some key facts to consider:
Frequently Asked Questions
What is the difference between UM and UIM insurance?
UM (Uninsured Motorist) insurance covers accidents with drivers who have no liability insurance, while UIM (Underinsured Motorist) insurance covers accidents with drivers who have liability limits too low to cover medical expenses
Does umbrella cover uninsured?
No, umbrella policies do not automatically include uninsured coverage. You must add it to your policy for an additional premium.
What is personal umbrella policy coverage?
A Personal Umbrella Policy (PUP) provides extra liability coverage beyond standard auto or homeowners insurance, protecting you and your household from large and potentially devastating claims or judgments. It's an essential layer of protection for your assets and financial well-being.
How do personal umbrella insurance policies provide liability coverage?
Personal umbrella insurance policies provide liability coverage beyond standard policy limits, protecting you from unexpected expenses and lawsuits that may exceed your primary insurance coverage. This extra layer of protection can shield you from financial ruin in case of unexpected claims like false arrest or libel.
Sources
- https://www.teamais.net/blog/should-i-buy-um-uim-coverage-on-my-personal-umbrella-policy/
- https://www.rlicorp.com/personal-umbrella-policy-um-uim
- https://www.mutual-assurance.com/um-uim-coverage
- https://www.weabenefits.com/resource/insurance-forms-and-brochures/personal-umbrella-insurance/
- https://www.autohomeboat.com/blog/underinsured-motorist/
Featured Images: pexels.com
