Umbrella Insurance - Extra Liability Protection for Less Than You Think

A serious car accident, an injury at your home, or a dog bite can generate a lawsuit that blows past your auto or homeowners liability limits in a hurry. When that happens, your savings, home equity, and retirement accounts are on the line.

An umbrella policy is the fix. It is one of the cheapest and most valuable policies you can own, and most families do not have one.

What an Umbrella Policy Does

An umbrella policy sits on top of your home and auto liability limits. When a claim exceeds the liability coverage on your underlying policy, the umbrella picks up where the base policy stops.

Here is how it works in practice. Say you cause a serious car accident and the other party's medical bills and lost wages add up to $800,000. Your auto policy has $300,000 in liability coverage. Without an umbrella, you owe the remaining $500,000 out of pocket. With a $1M umbrella, the policy covers the gap.

Umbrella insurance also covers things your underlying policies may not, including:

• Libel and slander claims
• False arrest
• Defamation
• Certain claims that fall outside standard home and auto liability

Your umbrella covers your entire household - you, your spouse, and your children living at home.

Who Needs an Umbrella Policy

If you have assets worth protecting, you need an umbrella. But even if your net worth is modest today, a judgment can attach to future wages and assets. You do not have to be wealthy to be sued.

You should seriously consider an umbrella if any of these apply:

• You have home equity, savings, investments, or retirement accounts. These are all exposed in a liability judgment.
• You have teen drivers in the household. Teen drivers are the highest accident risk demographic. One serious accident can exceed your auto liability limits fast.
• You own a home with a pool, trampoline, or dog. These are called "attractive nuisances" in insurance, and they increase your liability exposure significantly.
• You own rental properties. Landlord liability adds another layer of risk beyond your primary home.
• You coach youth sports, host events, or have regular guests. More people on or around your property means more exposure.
• Your net worth exceeds your combined auto and home liability limits. This is the clearest signal. If what you own is worth more than what your policies would pay, you have a gap.

What It Costs (This Is the Part That Surprises People)

Umbrella insurance is one of the best values in all of insurance. Here is what most families pay:

• $1 million umbrella: $200-$400 per year
• $2 million umbrella: $300-$600 per year
• Each additional million: $100-$200 per year

That is roughly $1 per day for $1 million in liability protection. There is no other policy that gives you that much coverage for that little money.

Rates vary based on the number of cars, drivers, properties, and your claims history. But for most families, an umbrella is surprisingly affordable.

How Umbrella Fits Into Your Full Program

An umbrella policy requires that your underlying auto and home policies carry minimum specified liability limits. Your carrier will tell you exactly what those minimums are - typically $300,000/$300,000 on auto and $300,000 on home.

Umbrella works best when your home, auto, and umbrella are with the same carrier or coordinated through one agency. That way there are no gaps between where your base policy stops and your umbrella starts.

When we do a personal insurance review, we look at all your policies together to make sure your umbrella actually connects to your underlying coverage the way it should.

For higher limits ($5M and above), see our Private Client umbrella program for families with significant assets.

Frequently Asked Questions

How much does umbrella insurance cost?

Most families pay $200-$400 per year for $1 million in coverage. Each additional million costs $100-$200. It is one of the cheapest ways to add significant liability protection to your household.

What does umbrella insurance NOT cover?

Your own injuries, your own property damage, business activities (you need commercial insurance for that), intentional acts, and contractual liability. Umbrella covers liability to others above your underlying policy limits.

Do I need umbrella insurance if I do not have a lot of assets?

Yes. A lawsuit judgment can attach to future wages and assets, not just what you own today. Umbrella also pays for legal defense costs. If you are ever named in a serious liability claim, you want umbrella coverage regardless of your current net worth.

Related reading: When to Add or Remove Umbrella Coverage Based on Your Lifestyle

Start Your Personal Insurance Review

Umbrella insurance does not work well bought in isolation. It needs to connect to your home and auto policies properly, with the right underlying limits in place. The best way to get this right is a full personal insurance review.

Call us at (801) 505-5500 or request a quote online. We will look at your full picture and make sure you are covered where it counts.