Jorin Johnson of the Superior Insurance Agency in Fargo, North Dakota says one portion of his agency’s customer base doesn’t need to be convinced about the value of extra personal umbrella policy coverage for uninsured and underinsured motorists: attorneys.
“It’s ironic, isn’t it?” Johnson asks. “Those people who have actually worked on that end of the case end up purchasing the additional insurance. I relay that story to existing clients—it does raise a few eyebrows and cements the need for the coverage.”
But with only 10% of consumers purchasing a personal umbrella, it’s also a market full of opportunity. Why aren’t more consumers buying?
The biggest consumer misconception: Only wealthy individuals need a PUP.
“A lot of people will say, ‘Well, I don’t have anything to sue for,’” says Julie Freemire of The Burns Agency in Clinton, New York. “But everyone has future wages. Retirement savings, future inheritances—it’s all fair game.”
Freemire says some clients think an umbrella isn’t necessary because they assume their underlying policy provides enough coverage. Erickson hears the same thing, but asks clients: “Do you really think $100,000 or $500,000 is going to satisfy major medical bills for a car accident if the other person doesn’t have insurance?”
When Erickson’s clients balk at the nominal additional cost to purchase a PUP, he reminds them “there are certain people who are on the road who are uninsured or underinsured. You have a lot to lose—they might not have a lot to lose.”
Johnson’s agency hired a full-time staff member to perform annual reviews with existing accounts. “She invites clients in for a review and talks about the need for an umbrella,” Johnson explains, noting the approach has helped the agency cross-sell more PUPs.
It Could Happen to You
Uninsured motorists are just one major reason for PUP claims. Many other scenarios can also cause a hefty lawsuit.
Freemire says her agency has seen an uptick in homeowners-related PUP claims, including incidents with dogs, people falling off ladders and slip-and-fall accidents. Someone sued one client after twisting their ankle while looking for a dog on the client’s property.
Freemire also notes that accidentally hitting a pedestrian or bicyclist could have grave consequences for someone without a PUP. “You didn’t see them, you hit them, they’re hurt—you get the paperwork in the mail from the lawyer,” she says. “Are you really going to feel comfortable having a $100,000 per person, $300,000 per accident limit?”
Johnson says RLI has helped his agency provide a competitive PUP quote to customers. He notes that prior to using the RLI product, his agency often ended up quoting a higher price to prospective customers. “It didn’t look good,” he recalls. “RLI has already been able to answer that need [for a competitive quote].”
Freemire says the flexibility of the RLI product makes it easy for agents to offer PUPs because the insured doesn’t need to have the same auto and homeowners carrier. Erickson says the product is easy to access through the Big “I” and he wants to spread the word to other member agents about the value of the program.
“I want to help our independent agents find tools to help them be a success,” Erickson says. “It’s a great product and it’s helping the greater good. The association has a great partnership with RLI.”