PLUP: What It Is and Why You Need It

What It Is.  Not to be confused with pulp in your orange juice, a PLUP, or Personal Liability Umbrella Policy, supplements your auto and homeowners insurance policies to provide additional personal liability protection (i.e. protection in case of a law suit over accidental injuries or property damage for which you are at fault). 

Why You Need It.  If you accidentally cause an injury to someone or damage to their property, a court judgment may award damages that exceed the limits of protection under your auto or homeowners policies.  In that case, the PLUP would kick in, covering damages as well as legal defense fees.  PLUPs are relatively inexpensive compared to other insurance products.  A PLUP providing $1 million of personal liability protection will generally only cost between $300 and $400 per year.   And if you have children, especially young drivers, this protection could be really important.

Example.  Suppose you are a Virginia resident and have $300,000 of personal liability coverage as part of your homeowners insurance.  An acquaintance comes over to visit after a winter storm, slips on your front steps, and breaks both legs.  He brings a law suit against you, and a court awards him $700,000 in damages, including compensation for pain and suffering.  Absent a PLUP, where will the $400,000 above and beyond your homeowners insurance coverage come from?

Risk Factors.  As mentioned above, having young drivers in your household is one risk factor for personal liability claims.  Other risks include:

• Practicing hobbies that could cause injury to others (e.g. skiing, surfing, hunting)
• Having a swimming pool or trampoline on your property
• Owning a dog, horse or other large or aggressive animal
• Hosting large parties in your home regularly
• Employing household staff
• Owning a rental home or renting a portion of your primary residence
• Serving on a charitable board or as a public figure or high-profile wealthy member of the community

If you have questions about whether to obtain a PLUP or how much coverage would be appropriate relative to your assets, please do not hesitate to call or email us any time.