What is an ‘Umbrella Policy?’
Personal Umbrella Policy, or “PUP,” is a type of insurance that provides liability coverage over and beyond your automobile or homeowner’s liability limits.
What if the liability coverage on your auto or homeowner policy isn’t enough to cover the damages of an accident you cause or an injury on your property? If you have a personal umbrella policy, you have additional protection that protects you after the underlying liability limits on your auto and homeowner policies are exhausted. An umbrella policy can protect you when your liability limits aren’t enough.
For example, If you are in an at-fault car accident that injures another driver, your regular automobile insurance will cover the other driver up to the liability limits on your policy, say $250,000. What happens if $250,000 is not enough to cover the other driver’s injuries and lost wages? The driver or his passengers could sue you, which means your personal assets would be at risk.
A PUP provides the additional coverage you need to protect your personal assets.