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An umbrella policy provides additional layers of liability protection. If the liability limits are exhausted on your home, auto, or other underlying insurance policy, your umbrella insurance policy takes over and provides you with additional protection. The cost is minimal compared to the comfort of knowing you're covered.
A personal umbrella policy extends the bodily injury and personal damage liability limits of your home or auto policies.
Consider the following scenario: Your home insurance provides $300,000 of liability coverage. A serious accident happens on your property, and you're sued for $1.3 million resulting in a judgment against you.Your insurance pays up to $300,000 for a covered accident, but you hold responsibility for paying the remaining $1 million.
If you had $1 million of coverage under an umbrella insurance policy, you'd be covered with nothing out of your pocket (other than your monthly premium). Instead, without the additional protection from a personal umbrella policy, you're looking at the possibility of needing to liquidate your assets to pay the remaining $1 million in this example.Talk to an agent to find out what the best level of coverage is for your situation.
Umbrella liability insurance provides an extra layer of financial protection above the liability limits of your homeowners, auto, boat, or other underlying insurance policies. If you're found legally responsible for damages that exceed the limits of one of those policies, an umbrella policy may help cover the remaining costs up to its coverage limit.
Umbrella insurance is designed to help protect your savings, investments, future earnings, and other assets from large lawsuits or liability claims that could otherwise have a significant financial impact.
Umbrella insurance is beneficial for anyone who wants additional liability protection beyond the limits of their standard insurance policies. Homeowners, business owners, boat owners, landlords, families with teenage drivers, pet owners, and individuals with substantial assets often choose umbrella coverage for added peace of mind.
Even individuals with modest assets may benefit, since future wages and earnings can sometimes be subject to legal judgments following a serious liability claim.
Umbrella insurance typically provides additional liability coverage for bodily injury, property damage, legal defense costs, personal injury claims such as libel or slander, and certain lawsuits that exceed the limits of your homeowners, auto, or recreational vehicle policies.
The exact coverages vary by insurance company, so it's important to review your policy to understand what is and isn't included.
Umbrella insurance generally does not cover your own injuries, damage to your own property, business liabilities unless specifically endorsed, intentional acts, criminal conduct, or contractual obligations. It also does not replace your homeowners or auto insurance—it simply provides additional liability protection once those policy limits have been exhausted.
Reviewing your existing insurance program with your agent can help identify any coverage gaps that may require separate policies.
The amount of umbrella coverage you need depends on your assets, income, lifestyle, and potential liability exposure. Many policies begin with $1 million in coverage, while higher limits of $2 million, $5 million, or more are available for individuals with greater financial exposure.
Your insurance agent can help evaluate your overall risk and recommend a coverage amount that fits your personal situation.
Compared to the amount of protection it provides, umbrella insurance is often one of the most affordable types of liability coverage available. The cost depends on factors such as the number of homes, vehicles, drivers, recreational vehicles, and other exposures being insured.
Many individuals are surprised to learn they can purchase $1 million of umbrella coverage for a relatively modest annual premium.
In many cases, yes. Umbrella liability policies often help pay for legal defense costs associated with covered liability claims. Attorney fees, court costs, settlements, and judgments can become extremely expensive, even if a lawsuit is ultimately resolved in your favor.
Having additional liability coverage can help protect both your assets and the financial burden associated with defending a lawsuit.
Yes. If someone is seriously injured on your property and you're found legally responsible, your homeowners insurance typically responds first. If the damages exceed your homeowners liability limit, your umbrella policy may provide additional protection up to its policy limit.
This added layer of coverage can be especially valuable in cases involving severe injuries or large legal judgments.
Yes. Most insurance companies require certain minimum liability limits on your homeowners, auto, and other underlying insurance policies before they will issue an umbrella policy. These required limits help ensure the umbrella policy functions as intended once the underlying insurance has been exhausted.
Your insurance agent can review your existing policies and recommend any necessary adjustments before adding umbrella coverage.
It's a good idea to review your umbrella insurance each year and whenever significant life changes occur. Purchasing a new home, increasing your assets, acquiring rental property, adding a teenage driver, purchasing a boat, or starting a business may all increase your liability exposure.
Regular policy reviews help ensure your umbrella coverage continues to provide the level of financial protection appropriate for your changing lifestyle and assets.
