Umbrella Insurance
What is umbrella insurance?
Personal umbrella insurance provides an extra layer of liability protection beyond the limits of your home, auto, or other personal insurance policies. It helps cover large claims—like lawsuits or serious accidents—that could put your savings, property, or future income at risk.
What does umbrella insurance cover?
Umbrella insurance kicks in after your primary liability limits (like auto or homeowners) are exhausted. It typically covers:
Bodily injury or property damage lawsuits
Legal defense fees
Libel, slander, or defamation claims
Liability for incidents on rental properties you own
Do I need umbrella insurance?
If you have assets to protect, umbrella insurance is a smart and affordable safeguard. You may want to consider a policy if:
You own a home or rental property
You have significant savings or investments
You have teen drivers or frequently host guests
You volunteer, serve on a board, or are active online
Here are a few examples of high-risk situations :
Home hazards
A backyard swimming pool can increase the risk of injury-related lawsuits.Slip and fall incidents
A visitor could get hurt on your property, whether it's your primary residence or a rental property you own.Teen drivers
If your teenager causes a serious car accident, you could be held financially responsible.Everyday risks
Even your online activity or volunteer work on a board could expose you to defamation or liability claims.
Without umbrella coverage, a major liability claim could put your home, savings, and future income at risk. In today’s litigious environment, an umbrella policy offers affordable peace of mind and an extra layer of protection when you need it most.
When would umbrella insurance apply?
Example:
You're involved in a car accident after accidentally running a stop sign. The other driver, a dentist, suffers a hand injury that requires surgery, preventing him from working. He sues for $650,000 to cover medical expenses and lost income.
Your auto insurance covers up to $500,000. Your umbrella policy steps in to cover the remaining $150,000—protecting your personal assets from a costly judgment.
How much umbrella coverage do I need?
Umbrella policies usually start at $1 million in coverage and can go as high as $10 million or more. A good guideline is to choose a limit that covers the total value of your assets, including:
Home equity
Vehicles, boats, RVs
Cash and savings
Investments and retirement accounts
Personal valuables (jewelry, art, etc.)
Keep in mind that the specific assets you could lose as the result of a judgment may vary by state.
Tip: Review your coverage annually. If your income or assets grow, update your policy to match your financial exposure.
How do I get umbrella insurance?
To qualify for an umbrella policy, you’ll need to meet a few basic requirements:
Home or renters insurance with at least $300,000 in personal liability coverage (some insurers may require $500,000).
Auto insurance with minimum liability limits of $250,000/$500,000/$100,000 (or $500,000/$500,000/$100,000, depending on the carrier).
A clean claims history and driving record that meets the insurer’s underwriting guidelines.
Your umbrella policy will only kick in after these underlying policies have paid out their limits.