What is Personal Umbrella Insurance?
Personal Umbrella Insurance provides an extra layer of liability protection above the limits of certain policies you may already have, such as auto, homeowners, renters, or watercraft insurance.
If a covered liability claim exceeds the available limit on one of those policies, your umbrella policy may provide additional protection up to its own coverage limit. Depending on the policy, it may also cover certain personal liability situations that an underlying policy does not.
Why do you need Personal Umbrella Insurance?
Sometimes the liability coverage included with your home or auto insurance simply isn’t enough.
A serious accident or lawsuit can result in damages that exceed your existing policy limits and potentially put your savings, investments, home equity, and future income at risk. Personal Umbrella Insurance provides an additional financial safety net when a covered liability claim becomes especially costly.
What does Personal Umbrella Insurance cover?
Depending on the policy, Personal Umbrella Insurance may provide additional protection for:
- Bodily Injury Liability: Helps protect you when you are legally responsible for seriously injuring another person.
- Property Damage Liability: Helps cover damage you cause to someone else’s property.
- Personal Injury Claims: Certain policies may cover claims involving libel, slander, invasion of privacy, and other personal injury offenses.
- Legal Defense Costs: May help cover legal expenses associated with a covered liability claim.
- Additional Liability Exposures: Some umbrella policies may cover certain situations that aren’t covered by an underlying policy, depending on the terms and exclusions of the umbrella policy.
Umbrella insurance is primarily designed for liability protection. It generally does not replace insurance that protects your own home, vehicle, or other property from physical damage.
Frequently Asked Questions
Q: How does Personal Umbrella Insurance work with my other policies?
A: Your applicable underlying policy, such as auto or homeowners insurance, generally responds first to a covered claim. If that claim exceeds the policy’s available liability limit, your umbrella policy may provide additional coverage up to its own limit.
Q: How much umbrella coverage do I need?
A: There isn’t one amount that’s right for everyone. Your savings, investments, home equity, future income, lifestyle, and potential liability risks can all help determine how much additional protection makes sense for you.
Q: Do I need certain home or auto liability limits first?
A: Usually, yes. Umbrella insurers commonly require you to maintain minimum liability limits on underlying policies such as auto, homeowners, or watercraft insurance. Those requirements can vary by insurer.
Before You Secure Personal Umbrella Insurance
Umbrella coverage may be especially worth considering if you have significant assets or activities that increase your liability exposure. This can include owning rental property, having a swimming pool, owning recreational vehicles or watercraft, or simply wanting additional protection beyond your standard policies.
Your umbrella and underlying policies should be reviewed together so they work properly as one overall protection plan.