• Insurance Nerd Herd

Do I need a personal umbrella policy? And what is it anyway?

What is Personal Catastrophe Liability (PCL) Insurance, also known as an umbrella policy?

Personal Catastrophe Liability policies are liability insurance policies that are typically low cost but carry high limits of protection, typically starting at $1,000,000. They add a layer of protection to your already existing personal liability coverage like the coverage included with your personal home, auto, and boat policies. These policies are meant to cover you above your already existing limits in the event you are found to be legally responsible for the personal injuries or damage to property of persons outside of your household. This coverage can include non-physical injuries like slander or emotional stress.

Who should purchase PCL insurance? 

Purchasing a PCL policy is a personal decision. Accidents and law suits can happen to anyone. Therefore, we are of the opinion that it is never a bad idea. However, some people have more exposure risk than others. Clients who carry a higher risk, like those with youthful drivers on their policy are a good example of someone we would always recommend PCL to. Anyone who has high-value assets like homes worth more than $300,000 or large retirement funds would also be someone we would recommend the policy to, as they have more to lose. Should a judgment against you exceed the amount of liability coverage on your policies, your assets can be seized in order to repay the judgment. However, a lack of assets will not shield you from a high judgment against you. This is why we say that it is never a bad idea to obtain this coverage. 

How much does it cost? 

Most people are surprised to find out how little PCL insurance costs. For most people, an extra $1,000,000 in coverage costs less than $20 a month. That is not very much in return for the priceless benefit of peace of mind and protecting the things that are important to your family. 

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