Umbrella insurance is a type of personal liability insurance that provides an additional layer of coverage beyond what your homeowners, auto, or other vehicles/boat/etc. coverage might provide. We call those underlying coverages.
An umbrella policy’s coverage is triggered when you reach the limit on the underlying liability coverage for these policies or if you have a claim where no underlying coverage exists.
Think of it as an extra layer of protection for your assets. If someone sues you, your underlying policies (coverages) will provide some liability coverage to pay for judgments against you and your attorney's fees. However, you may want to have the extra coverage of umbrella insurance in case a judgment against you exceeds your policy limits.
Other reasons to consider umbrella insurance include certain activities and lifestyle risks that can attract the risk of someone suing you, such as:
- owning a swimming pool and having pool parties
- renting out a property you own
- having a teenage driver in the house
Since a personal umbrella policy goes into effect after the underlying policy coverage is exhausted, certain limits usually must be met to purchase umbrella coverage.
Most insurers will want you to have at least $500,000 of liability insurance on your auto policy and $300,000 on your homeowners policy before selling you an umbrella liability policy for $1 million of additional coverage.
Still wondering if you need that additional coverage? Call or text us and we can determine if it makes sense for you.