Personal Umbrella Insurance provides extra liability coverage. It supplements your auto and homeowners insurance and helps protect your assets and future earnings.
What is Personal Umbrella Insurance?
If you're in an auto accident or someone is injured on your property, your auto or homeowners insurance will cover liability up to the policy limits. However, claims can exceed those limits and leave you responsible for the remainder.
Personal umbrella insurance kicks in after your underlying auto or homeowners policy limits are reached. It can cover large judgments, legal fees, and other liability costs so your home, savings, retirement accounts, and future earnings stay protected. For more information about policy options, see Personal Umbrella Insurance Policy.
Additional Benefits of Personal Umbrella Insurance
- Personal injury coverage for claims such as libel, defamation of character, or slander
- Worldwide coverage if you cause an accident while traveling abroad
- Vacation rental liability for rental equipment like scooters, boats, or jet skis
- Defense coverage for attorney fees and related legal costs
Who Needs Personal Umbrella Insurance?
Umbrella coverage is not just for the very wealthy. Anyone exposed to liability risk can benefit, since a single lawsuit or large claim can be costly. Even if you do not yet have significant assets, umbrella insurance helps protect your future earnings and lifestyle.
How Much Personal Umbrella Insurance Should You Buy?
Policies are typically sold in million-dollar increments. A common rule of thumb is to consider at least $1 million in coverage, with higher amounts if you have rental properties or greater exposure. You can compare primary and excess policy structures at Personal Umbrella Insurance: Primary and Excess.
How Much Does Personal Umbrella Insurance Cost?
Cost varies with risk, location, and the amount of coverage. As a general example, many homeowners with two cars might expect relatively modest premiums for the first million dollars of coverage compared with the protection it provides.
For assistance choosing the right personal umbrella insurance policy for your needs, talk to your insurance agent.
Frequently Asked Questions
Does umbrella insurance replace my auto or homeowners insurance?
No. Umbrella insurance provides additional liability coverage that applies after the limits on your auto or homeowners policy are exhausted.
Will umbrella insurance cover claims made while traveling abroad?
Many policies include worldwide coverage for liability, but you should confirm the specific terms and any exclusions with your insurer.
Does umbrella insurance pay for legal defense costs?
Yes. Most umbrella policies cover legal defense costs associated with a covered liability claim in addition to damages.
How much underlying insurance do I need to qualify?
Insurers typically require certain minimum limits on auto and homeowners policies before they will sell an umbrella policy; check with your provider for exact requirements.