PUPs Help Protect Without Staining the Rug

Adorable and cuddly, puppies can be a handful—and even destructive. Instead of creating problems, like puppies, PUPs (Personal Umbrella Policies) help protect you from unexpected events like a fatal auto accident that results in a lawsuit. Typically, the PUP kicks in once your underlying policy has paid out its limits.

In today’s litigious society, lawsuits are becoming more common and can deplete your bank account and threaten to take everything you own, including your home.

Many people have a “that-could-never-happen-to-me” attitude.   However, finding yourself tangled up in a lawsuit is a realistic possibility. Say your teen son, excited about his new-found independence, drives his buddies to check out the latest movie. On the way there, they’re involved in a major accident, seriously injuring several people in both cars. You could be held financially liable, and the costs involved could far exceed your standard policy.

No one wants to find themselves in these kinds of worst-case scenarios. That’s why you should know more about PUPs (the kind that don’t lick—or bite); an insurance option that could save you big money:

Q: Should I consider purchasing a PUP even though I already have liability insurance on my other policies

A: A PUP provides coverage above the limits of your auto, homeowners or other policies. If a car accident is your fault and the other driver’s injuries are severe, he may require benefits beyond the $250,000 your policy covers, meaning you could be sued. And you can imagine what you might have to pay if the accident causes a surgeon or other highly-compensated professional to miss work for a year due to his or her injuries.

Q: How do I decide whether a PUP is a good choice for me?

A: Start by evaluating your assets. Consider how much you have to lose. Look beyond your savings, and think about things like your house, your valuables, your vehicles and your annual income. Realize that the more money you have, the greater likelihood someone will find a reason to take you to court.

You also should consider other factors. Do you have young drivers on your auto policy? Are you a Little League coach? Do you own animals? A boat? A swimming pool? A motorcycle? All of these can increase your risks and the value of a PUP.

Q: What kind of coverage is available?

A: PUPs are typically available in increments of $1 million all the way up to $5 million.

Q: How much do I need and what will it cost?

A: According to an MSNBC report, many experts would advise you to carry at least $1 million worth of coverage, even if you don’t have a net worth that high. PUPs are more affordable than you might think. Depending on where you live, the cost for a PUP can be less than a dollar per day.

Q: What else should I look for in a PUP?

A: Make sure your policy also covers you outside the United States. Some policies also will pay for your attorney costs and lost wages.

In today’s lawsuit-prone society, you don’t have to be a millionaire to be sued like one. Talk to your insurance agent about bringing a PUP into your policy portfolio.