Survey Says Personal Liability Limits Fail to Keep Pace With Growth in Household Assets

May 25, 2001

According to a survey by the Chubb Group of Insurance Companies Personal liability protection is not keeping pace with personal asset growth or litigation trends, leaving affluent individuals and their families exposed to the financial consequences of lawsuits.

The survey, completed by 266 U.S. households, with annual incomes in excess of $100,000, found that 88 percent of the households saw an increase in their personal wealth during the past two years.

Almost one-third (30 percent) reported increases greater than 50 percent. Despite the fact that nearly three-quarters (71 percent) of respondents said they regularly assess the adequacy of their insurance protection, nearly two-thirds (63 percent) admitted that their excess liability, or umbrella, limits have not kept pace with the growth in their assets.

Meanwhile, jury awards have continued to increase in size. According to Jury Verdict Research, the average award of $1,004,308 in 1999, the latest year for which data has been compiled, was 240 percent higher than in 1994, when it was $418,478. A growing number of awards (14 percent) were in excess of $1 million.

In vehicular accident cases, the average award during this recent five-year period climbed from $75,127 to $315,653, while in personal negligence cases, the average award skyrocketed from $264,765 to $2,959,047. And these figures exclude defense costs, which can run well into the hundreds of thousands of dollars–even when the defendant wins in court.

Eighty-six percent of respondents to Chubb’s survey are concerned about the legal liability they face in today’s environment. Sixty-two percent believe that personal excess liability coverage provides protection against legal liability. Yet about 25% of the respondents do not purchase the coverage because they don’t see the need for it, thinking that homeowners insurance adequately covers their exposures. Nearly one-third (30 percent) carry less than $1million in liability coverage, while 36 percent have $2 million or more in coverage.

Those who receive advice from an insurance agent or broker are more likely than those who don’t to carry personal excess liability insurance. Those who adjust their excess liability levels at the same pace as their assets growth tend to serve on the board of a charity or homeowners association and engage in multiple forms of asset protection, such as portfolio diversification, financial planning and life insurance purchasing, among other attributes.

A copy of the survey results is available on the Internet at

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