Umbrella Liability Proposal

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By Phyllis Van Wyhe, CPCU, CIC, CSP

Printable Version

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Have you ever quoted a personal umbrella only to have your client say they would like to "think it over?"  Your chances of writing the policy diminish whenever that happens.  The surest way of making the sale is to present them with the information that has just been discussed. Drop this umbrella proposal in the mail to them.  Then follow up with a phone call to make certain they received it and ask "Is there any reason you would not want to do this?"

An umbrella liability policy sits on top of other insurance that includes liability protection, such as your homeowners, auto and boat policies.  When the liability coverage provided by these policies is not enough, the umbrella policy is triggered, spreading its protection (hence the term "umbrella.")

Recent Real-Life Cases:

• A 40 year-old window washer broke his heel in a fall after a downspout he was holding on to broke away from the house on which he was working.  Although the worker was found partially responsible, the fall cost the homeowner $1.2 million.

• A professional dancer suffered permanent knee damage and an end to her career when she was knocked down on a beginner’s ski slope.  The case went to trial, where it cost the defendant $2.2 million.

• At an end-of-school swim party, a 16 year-old dove and hit his head on the bottom of the pool.  He became a quadriplegic, and the case resulted in a $1.5 million settlement against the homeowner.

To Qualify:

Eligibility varies with each company, but all companies take into consideration your driving record and any past liability losses.  In order to obtain an umbrella policy, you may have to place all of your primary policies with the company writing the umbrella.  Insurance companies also require that you maintain certain minimum levels of liability coverage on the primary policies.

The Cost:

To increase primary limits: __________
$1 million umbrella __________
$2 million umbrella __________
$5 million umbrella __________

This article is excerpted from the book Writing A Personal Umbrella, written by Phyllis Van Wyhe, CPCU, CIC.