What is Umbrella Insurance?
Extra liability coverage that kicks in when your auto, home, or other policy limits are exceeded.
Understanding Umbrella Insurance
Umbrella insurance provides an additional layer of liability protection, typically in $1 million increments, beyond your underlying policies. It's relatively inexpensive because it only pays after your primary coverage is exhausted. Umbrella policies may also cover certain claims excluded by other policies.
Examples
- You cause an accident with $400k in injuries, but your auto liability limit is $300k. Your umbrella policy covers the remaining $100k.
- Someone sues you for libel, which your auto and home policies don't cover but your umbrella policy might.
- A $1 million umbrella policy might cost only $150-300 per year.
Common Questions About Umbrella Insurance
Who needs umbrella insurance?
Anyone with assets to protect should consider umbrella insurance. It's especially important if you have a high income, substantial savings, rental properties, a pool or trampoline, or teen drivers. Lawsuits can exceed standard policy limits quickly.
What underlying coverage do I need for an umbrella policy?
Umbrella insurers require minimum liability limits on your underlying policies, typically $250k/$500k for auto and $300k for homeowners. You'll need to raise these limits before qualifying for umbrella coverage.