Auto Insurance

Uninsured/Underinsured Motorist and the Personal Umbrella

By March 8, 2016 No Comments

Uninsured/Underinsured Motorist and the Personal Umbrella

Written By: Twin City Group

The personal umbrella policy is prime for those consumers who own at-risk assets that have a combined value that exceeds the liability limits in their other insurance policies like home and auto. At risk- assets are any possessions that can be liquidated to satisfy a court awarded judgment.

How the Umbrella Protects You

Most personal insurance policies, such as auto, home, boat, RV and renters, limit the liability coverage at $300,000 or $500,000. For many consumers, this limit of liability is insufficient and puts the consumer at risk of losing assets in the event of a claim for damages or injuries. Having personal umbrella coverage provides an additional layer of liability protection up to the limit of the policy which is generally from $1 million to $10 million. With this additional coverage in place, your at-risk assets are protected from forced liquidation to pay a court awarded judgment.

Gaping Holes in Umbrella Coverage

Not all umbrella coverage is the same. Many of the most popular insurers do not include uninsured/underinsured coverage in their umbrella policy. This is unfortunate for the consumer if they are unaware of the missing coverage because vehicle accidents, boating accidents, and other recreational accidents are prolific across the nation, and in many cases, litigation is a result. Without uninsured/underinsured liability coverage in your umbrella, your risk is only covered up to the limit of your auto, boat, or recreational vehicle policy.

What is Uninsured/Underinsured Motorist Coverage?

This coverage provides protection for you and the passengers in your vehicle if you are in an accident where the other driver is at-fault and is either uninsured or has insufficient limits of liability to pay for injuries to you and your passengers. Most consumers know that almost every state requires vehicle owners to carry 3rd party liability, but in most cases the limits are insufficient to cover the cost of medical care. Moreover, to make matters worse, many states are typically overwhelmed when it comes to tracking a driver’s responsibility to purchase even the minimum coverage required. A quick look at uninsured driver statistics reveals the following:

  • Nationally 1 in 7 vehicle owners is
  • In Tennessee 1 in 4 vehicle owners are uninsured.
  • In Florida 1 in 4 vehicle owners are uninsured.

It is also very important to note that although the state requires automobile liability coverage for every registered vehicle, the minimum limits are almost laughable in many states:

  • Florida – $10,000 per person and $20,000 per accident
  • Ohio – $12,500 per person and $25,000 per accident
  • New Jersey – $15,000 per person and $30,000 per accident

So, in many states, even if the vehicle owner is responsible enough to carry the mandatory insurance, in many cases that same vehicle owner is carrying only the less than adequate limits required by the state. With the average cost per day in an intensive care unit running about $6,200, and a semi-private room running about $2,500 per day, a legally insured driver from Florida carrying the state minimums, has enough coverage for one or two days. After their policy limits are exhausted, they are personally responsible for paying for your injuries. Knowing that this driver was carrying the minimum insurance limits on their vehicle, do you really believe they have sufficient liquid assets to pay for your 15 or 30 days stay in the hospital?

Contact an insurance professional at Twin City Group and let them put their experience and market access to work in finding you the best umbrella policy to protect your assets that you have worked so hard to obtain.