The personal liability coverage available through a homeowners or automobile policy is simply not enough to protect you. An umbrella policy can offer a higher level of liability coverage protecting you and your family from damages for which you may be held responsible. The greater your assets, the more you potentially have at risk. Umbrella coverage can help protect you against personal liabilities that could attack a substantial portion of your current assets, future assets or future earnings.

A personal umbrella liability policy is an insurance contract designed to increase the liability protection over and above a standard home and/or auto insurance policy. The personal umbrella extends your liability protection beyond the primary policy limits - usually sold in million dollar increments. An umbrella may be obtained once your home and auto insurance policies meet a minimum "attachment point" (typically, a liability limit of $250,000 or $500,000).

Personal umbrella policies provide four elements of coverage:

• Personal injury: Includes mental anguish, false arrest, wrongful entry/eviction, malicious prosecution, libel, slander, defamation of character, invasion of privacy or negligent infliction of emotional distress (not all umbrella policies are the same and/or include all coverage noted)
  

• Bodily injury: Includes physical injury or death - in some jurisdictions, this includes emotional injury




• Property damage: Includes destruction of the property of others, cost of recreation, and loss of use. Worth noting - an umbrella policy does not provide coverage for your own property (such as not having sufficient limits to cover a homeowner's loss)

• Defense coverage: Includes groundless, false, and fraudulent suits, loss of earnings, bail bond costs and other reasonable expenses

The price of an umbrella policy depends on three main rating factors - the dollar limit of coverage, the number of properties owned/rented and the number of automobiles/watercraft owned. The cost associated with automobiles and watercrafts are much higher than the cost for each property location.

For example, the premium for a $5 million umbrella for an individual with one home and one auto ranges from $270 to $550 per year. The cost of a $10 million umbrella for a family with two homes, one rental property and three autos ranges from $970 to $1,750. The cost varies due the number of exposures and the location addresses.

• You drive down a busy street and accidentally injure a successful entrepreneur in the crosswalk. Medical costs, lost earnings and damages amount to millions.

• A 15-year-old guest at your son's pool party dives unknowingly into the shallow end of your pool, and suffers devastating paralysis and injuries amounting to millions.

• Your tenant sues you for wrongful eviction, unlawful entry and slander. The cost to defend may be in excess of $100,000.

• You're having a wide-screen television delivered to your home, a deliveryman slips on your wet steps and fractures his skull. Damages are several hundred thousand dollars.

• While carrying your umbrella in the rain, you accidentally poke the eye of an executive. The executive loses her eye and the injury causes significant disfigurement. Medical costs, lost earnings and damages amount to millions.

Umbrella coverage can help protect you against personal liabilities that could attack a substantial portion of your assets or future earnings. For a few hundred dollars a year, you may add an umbrella policy or increase your policy limits commensurate to your growing assets and "risk factors." Talk to your personal insurance agent regarding this important coverage.

Content provided by Daniel Glunt of Fort Point Insurance Services,Inc. (415)781-8801