Why Personal Umbrella Insurance is Essential for Your Clients
As a personal umbrella account executive, you provide clients with peace of mind and financial protection against life’s unexpected events. Many clients may not fully understand why they need umbrella insurance or how it protects their assets. In this blog post, we’ll look at a real world example of how a personal umbrella policy protected the assets of an insured who was involved in a serious car accident. We’ll also examine key trends in claims and settlements, providing you with data-driven insights and compelling talking points to help educate your clients. Our goal is to equip you with the knowledge and strategies needed to position umbrella coverage as an essential component of your clients’ financial protection plan.
Auto Liability: A Growing Risk That Many Clients Underestimate
Clients often believe their auto insurance policy provides sufficient coverage, but the reality is that standard policies can leave dangerous gaps. Consider these key statistics from the Insurance Information Institute (III):
In 2021, the average bodily injury settlement for a car accident was well over $18,000, with injury claims averaging $20,000.
Severe accidents involving multiple injuries or fatalities can easily result in claims exceeding $1 million.
40% of personal umbrella claims stem from auto accidents, making them a leading cause of high-cost liability claims.
The average jury verdict for car accidents in 2021 was over $100,000, and severe cases frequently result in multi-million-dollar settlements.
Your clients may not realize that their auto insurance limits could be exhausted with a single serious accident. This leaves their savings, home, investments, and future income at risk.
Your role as an advisor is to help clients understand these risks and take proactive steps to protect their financial future.
Case Study: When Auto Insurance Isn’t Enough
One of the most effective ways to help clients understand the need for umbrella insurance is through real-world scenarios.
Scenario: A Multi-Vehicle Accident with Fatalities
Your insured has a youthful driver in their household, who is at fault in an accident that resulted in two fatalities and multiple injured.
The total cost of legal fees, medical expenses, and compensation reaches $3 million.
The driver’s auto policy has a liability limit of $500,000, leaving them personally responsible for the remaining $2.5 million.
With an umbrella policy carrying a $5 million limit, their financial interests are covered.
Without an umbrella policy, the client’s personal assets—home, savings, and even future earnings—could be seized to cover the damages. This example clearly demonstrates why high-net-worth individuals, business owners, or even everyday families should consider umbrella coverage.
Why Umbrella Claims are on the Rise
As an account executive, understanding the key factors driving umbrella claims will help you educate clients and position umbrella insurance as a necessary safeguard.
Medical Cost Inflation
The cost of hospitalization, emergency care, and rehabilitation is rising rapidly.
Even minor accidents can lead to substantial medical bills, easily exceeding standard auto insurance limits.
Increased Settlements & Jury Awards
Juries are awarding larger payouts to accident victims.
Legal costs continue to rise, adding to overall settlement amounts.
The Growing Number of Underinsured Motorists
Many drivers carry only the state minimum insurance, which is often insufficient to cover serious accidents.
When an underinsured driver causes a crash, victims must rely on their own coverage or pursue legal action.
Your clients may not realize that even if they drive safely, they can still be financially impacted by someone else’s negligence.
Risk Mitigation: Helping Clients Protect Themselves
Beyond insurance, proactive risk management can help clients reduce their likelihood of needing an umbrella claim. Encourage them to:
Practice Safe Personal and Property Management
Secure their home and assets to prevent liability risks.
Ensure proper maintenance of vehicles and properties.
Maintain Adequate Auto Insurance Coverage
Regularly review policy limits to ensure sufficient protection.
Consider increasing auto liability limits before adding umbrella coverage.
Follow Safe Driving Practices
Avoid distractions and drive defensively.
Follow all traffic laws to reduce accident risks.
A combined approach of risk management and umbrella coverage is the best way for clients to protect their wealth and minimize financial exposure.
How to Position Umbrella Insurance to Your Clients
As an account executive, you play a key role in helping clients see the value of umbrella coverage. Here’s how to position it effectively:
Lead with Real-World Risks
Use statistics and case studies to help clients see how quickly costs can escalate.
Explain that auto insurance alone may not be enough to fully protect their financial well-being.
Emphasize the Affordability of Umbrella Policies
Many clients assume umbrella insurance is expensive, but policies typically cost a few hundred dollars per year for millions in coverage.
Frame it as high-value protection for a relatively low cost.
Ask the Right Questions
“If you were found liable in a serious accident, do you have enough coverage to protect your home, savings, and income?”
“If someone sued you for more than your auto insurance limits, how would you cover the remaining costs?”
Position Yourself as Their Trusted Advisor
Clients rely on you to identify risks they may not have considered.
Make it clear that offering umbrella insurance isn’t just about selling a policy—it’s about ensuring their financial security.
Final Thoughts: Offering Umbrella Insurance is About Protecting Your Clients
As an account executive, you are providing a critical layer of protection for your clients’ financial well-being.
When presenting umbrella insurance, remind clients that:
It’s not just for high-net-worth individuals. Anyone with assets to protect should consider it.
Auto liability claims are rising, and a single accident could jeopardize their financial future.
For a relatively low annual premium, they can secure millions in additional coverage.
By making personal umbrella insurance a key part of your client conversations, you can ensure they are fully protected and strengthen your role as a trusted advisor in the process.
Source: Insurance Information Institute (III)
