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Umbrella Insurance

Umbrella Insurance Policies

Umbrella insurance provides additional protection in conjunction with existing coverage. It can protect you and your assets from major lawsuits. In short, this policy boosts your liability coverage above existing limits of your homeowners, boat, and auto insurance.

The Workings of an Umbrella Policy

This policy comes into play when the existing liability coverage on your primary insurance is not enough to cover your expenses.

For example, say you cause an accident and the other driver is seriously injured. Your auto insurance has a limit of $150,000 to cover all of the other driver’s medical expenses. But what if that is not enough? If you are sued for $850,000, your auto policy will only pay $150,000. That means you are liable for the remaining $700,000. A personal umbrella policy can provide the extra coverage. Otherwise, you have to come up with the money from your own pocket.


Umbrella insurance is usually available in $1 million increments. You will receive $1 million or more in liability coverage. This is extra liability beyond the limits of your existing policies. It will also cover claims that are not usually covered by standard policies. This includes incidents such as slander, libel, and accidents with rented vehicles. You will also have legal defense assistance, including costs and attorney fees.

This is beneficial because if you are sued, it is possible you could lose everything. The more you have, the more you have to lose. This coverage helps shield your personal assets. In other words, you will not have to sell your house to pay for a lawsuit. The insurance will help prevent that.

Umbrella insurance is generally purchased by people in a high income bracket. They are generally at the most risk for facing lawsuits. However, anyone can benefit from umbrella insurance.