Umbrella Insurance

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What you need to know about Umbrella Insurance

A personal umbrella policy is an essential component of an individual’s financial risk management strategy, designed to provide an additional layer of liability insurance above and beyond the limits of the insured’s homeowners, auto, and boat insurance policies. This form of insurance is crucial for protecting financial assets against the possibility of large claims that exceed the primary insurance limits.

Understanding Personal Umbrella Policies

At its core, a personal umbrella policy kicks in where your underlying liability limits end. For example, if you’re involved in a car accident where the damages exceed the liability coverage limits of your auto insurance, your umbrella policy would cover the excess costs up to the limits of the umbrella policy. Typically, these policies start with $1 million in coverage, with the option to purchase higher limits. This coverage extends to incidents involving bodily injury, property damage, and certain lawsuits, providing broader protection than what is typically offered by standard insurance policies.

Why It’s Important

1. Asset Protection

The primary reason to carry a personal umbrella policy is to protect your assets. In our litigious society, being sued for damages that exceed your primary insurance coverage is a real possibility. Without adequate protection, your assets, including savings, investments, and even future earnings, could be at risk to satisfy a judgment.

2. Coverage for Additional Risks

Umbrella policies often cover claims that may not be included in standard liability policies, such as libel, slander, false arrest, and even some instances of mental anguish. This broader coverage ensures that you’re protected against a wider range of potential financial liabilities.

3. Peace of Mind

Knowing you have an umbrella policy provides peace of mind that you and your assets are better protected. It’s comforting to know that in the event of a major lawsuit, you have coverage in place that extends well beyond the typical limits of your primary insurance policies.

4. Cost-Effective Coverage

When considering the amount of additional liability coverage you get, umbrella policies are relatively inexpensive. The cost-effectiveness of this additional layer of protection makes it an attractive option for many individuals, especially those with significant assets to protect.

5. Protecting Future Income

For individuals in the prime of their earning years, an umbrella policy not only protects current assets but also future income. A large liability claim can lead to wage garnishments and other means of judgment collection that could severely impact your future financial stability.

Who Needs Umbrella Insurance

While everyone can benefit from the added protection of an umbrella policy, it’s particularly important for those who have a higher risk of liability claims or those with significant assets to protect. This includes homeowners with pools or trampolines, dog owners, individuals who frequently host guests, and those who are well-known or have a high net worth. Essentially, the more you have to lose, the more you need an umbrella policy.


In conclusion, a personal umbrella policy is a critical component of a comprehensive risk management plan. It provides an essential safety net that goes beyond the limitations of standard liability policies, offering protection against potentially devastating financial claims. For anyone looking to safeguard their financial future, investing in a personal umbrella policy is a wise and prudent decision. This extra layer of protection can be the difference between financial stability and ruin in the face of unexpected liabilities.

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Deciding what life insurance coverage is right for you and your family, and which company has your best interest in mind is often the hardest part. Let us walk you through the process to make sure you get the most protection for your money. 

An Umbrella Policy is excess liability coverage. It adds an extra layer of coverage above your underlying policies, such as your home or auto insurance. In the event the coverage on an underlying policy isn’t enough, the umbrella would kick in for more coverage. 

An Umbrella Insurance policy is a great product that shores up your “liability defense” to protect your assets. If you’re sued and you don’t have enough insurance, your assets and investments could be at risk. This is why Umbrella Coverage is so important. 

Not at all. For $1,000,000 in coverage, most Umbrella policy’s are only a couple hundred dollars per year. 

The information provided here is for informational purposes only. Umbrella insurance coverage and regulation can vary from state to state, so be sure to check your local laws and regulations or speak to a licensed insurance agent in your state.