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Your home, vehicle, business activities, and personal assets can expose you to significant liability risks. A serious accident or lawsuit could potentially result in costs that exceed the liability limits of your underlying insurance policies.
Umbrella Insurance provides an additional layer of liability protection above certain underlying insurance policies, helping protect your finances when a covered claim exceeds the limits of those policies.
Umbrella insurance is a type of personal liability coverage that can provide additional protection after the liability limits of certain underlying policies have been exhausted.
Depending on the policy, umbrella coverage may sit above insurance such as:
Homeowners insurance
Renters insurance
Condominium insurance
Personal auto insurance
Boat insurance
Other qualifying underlying policies
Umbrella insurance generally does not replace your existing insurance. Instead, it can provide additional liability limits when a covered claim exceeds the underlying policy’s limit.
A major accident can result in substantial financial consequences.
For example, you could be held responsible for:
A serious auto accident
A visitor’s injury at your home
Damage caused by a member of your household
An incident involving a recreational vehicle or boat
Certain personal liability claims
If the resulting covered liability exceeds your underlying insurance limit, you could potentially be responsible for the remaining amount.
Umbrella insurance can provide an additional layer of protection against eligible claims.
Think of your insurance protection as layers.
Your Underlying Policy
Provides the first layer of liability protection up to its applicable limit.
Umbrella Policy
May provide additional liability coverage after the underlying limit has been exhausted, subject to the umbrella policy’s terms.
Your Personal Assets
Without sufficient insurance, you may potentially face personal financial exposure beyond your insurance limits.
The exact way coverage responds depends on the circumstances of the claim and the applicable policies.
Umbrella insurance may provide additional liability protection for certain covered situations involving:
A serious accident could result in medical expenses, lost income, rehabilitation costs, and other damages.
An umbrella policy may provide additional coverage when an eligible claim exceeds the underlying liability limit.
If you are legally responsible for covered damage to another person’s property, umbrella insurance may provide additional protection above applicable underlying limits.
Umbrella policies may extend protection to certain personal liability exposures beyond the limits of your underlying policies.
Depending on the policy, umbrella insurance may provide coverage for certain claims involving offenses such as:
Libel
Slander
Defamation
False arrest
Invasion of privacy
Coverage depends on the specific policy and applicable exclusions.
Umbrella insurance isn’t only for extremely wealthy individuals.
It may be worth considering if you:
Own a home
Have significant savings or investments
Own rental property
Have teenage drivers
Own multiple vehicles
Own a boat
Frequently host guests
Have substantial future income
Participate in activities with higher liability exposure
Want additional liability protection
Your need for umbrella insurance depends on your personal circumstances and risk exposure.
Your homeowners insurance provides liability protection, but the policy has a specific liability limit.
A serious accident involving your home or property could potentially result in a claim larger than that limit.
Umbrella insurance can provide additional liability protection above the underlying homeowners coverage when the claim qualifies.
A serious auto accident can produce significant financial consequences.
Medical expenses, lost wages, rehabilitation, legal costs, and damages can quickly become substantial.
Umbrella insurance may provide additional liability protection after qualifying auto liability coverage has been exhausted.
Because umbrella policies typically require specific underlying auto liability limits, maintaining the required underlying coverage is important.
Owning rental property can create additional liability exposure.
A tenant or visitor could potentially suffer an injury on a property you own and make a claim against you.
Umbrella insurance may provide additional liability protection above qualifying underlying policies, subject to the policy’s requirements.
Landlords should also ensure that their underlying property and liability coverage appropriately reflects their rental activities.
Boating can involve significant liability risks.
Accidents can involve:
Other boats
Passengers
Swimmers
Docks
Property
Watercraft
Injuries
If your umbrella policy covers the relevant watercraft exposure, it may provide additional liability protection above qualifying underlying coverage.
Teen drivers can present a higher liability exposure for households.
A serious accident could result in substantial injuries or property damage.
Parents with teenage drivers may want to review:
Auto liability limits
Driver eligibility
Household vehicle use
Umbrella requirements
Additional liability protection
An umbrella policy can provide an additional layer of protection when its terms and underlying requirements are satisfied.
If you own rental properties, your liability exposure may extend beyond your primary residence.
Potential risks can include:
Tenant injuries
Visitor injuries
Property-related accidents
Claims involving rental activities
Make sure your insurer knows about your rental properties and that your underlying insurance satisfies any umbrella policy requirements.
There isn’t one amount that works for everyone.
When considering an appropriate umbrella limit, think about:
Consider your home equity, savings, investments, and other assets that could potentially be exposed in a serious liability claim.
Future earnings may also be relevant when considering the financial consequences of a significant liability judgment.
Consider whether you:
Own rental property
Have teenage drivers
Own boats
Host guests frequently
Travel extensively
Participate in activities with additional liability exposure
Umbrella policies may require certain minimum underlying liability limits.
Umbrella policies generally require you to maintain specific underlying insurance limits.
For example, your umbrella insurer may require certain liability limits on your:
Homeowners policy
Auto policy
Boat policy
Other qualifying policies
If you reduce your underlying coverage below the required amount, you could create a coverage gap.
Always review the underlying insurance requirements before making changes to your policies.
Umbrella insurance is not designed to cover every type of loss.
Depending on the policy, exclusions may apply to:
Your own property damage
Your own medical expenses
Intentional acts
Certain business activities
Certain professional liability claims
Certain contractual obligations
Certain criminal acts
Certain high-risk activities
Other specifically excluded exposures
Some risks may require separate insurance policies.
The terms umbrella and excess liability are sometimes used interchangeably, but they can have important differences.
Excess liability insurance generally provides additional limits over an underlying policy.
Umbrella insurance may provide broader protection in certain circumstances, potentially extending beyond the underlying policy’s coverage, depending on the policy wording.
The actual coverage depends on the specific insurer and policy.
Consider a hypothetical situation:
You are involved in a covered accident and are legally responsible for damages that exceed the liability limit of your underlying insurance.
Your underlying policy may pay up to its applicable limit.
If the claim qualifies under your umbrella policy and the underlying coverage has been exhausted, the umbrella policy may then provide additional protection up to its applicable limit.
This can help reduce the amount of your personal assets potentially exposed to an eligible covered claim.
Depending on the policy, umbrella insurance may extend to certain members of your household.
Coverage can vary based on:
Who is insured
Household relationships
Vehicle ownership
Property ownership
Activities
Policy definitions
Review who qualifies as an insured person under the policy rather than assuming everyone in your household is automatically covered.
Before purchasing an umbrella policy, gather information about your existing insurance.
Review:
Homeowners liability limits
Auto liability limits
Boat insurance
Rental property insurance
Other personal liability policies
Valuable assets
Household drivers
Additional properties you own
This information can help determine whether your current underlying coverage meets the umbrella insurer’s requirements.
Umbrella insurance provides an additional layer of liability protection above certain underlying insurance policies, subject to the umbrella policy’s terms and limits.
No. People with different levels of assets may consider umbrella insurance depending on their liability exposure, income, property ownership, and desire for additional protection.
No. Umbrella insurance generally supplements underlying coverage rather than replacing it.
It may provide additional liability protection for eligible auto-related claims after applicable underlying auto liability coverage has been exhausted.
Some umbrella policies can provide additional liability protection related to qualifying rental properties, subject to policy requirements.
Generally, umbrella insurance is liability coverage rather than personal medical insurance. It is primarily designed to protect against certain claims made against you by others.
The appropriate limit depends on your assets, income, lifestyle, activities, properties, existing insurance, and overall liability exposure.
Often, yes. Umbrella insurers commonly require specific minimum underlying liability limits before the umbrella coverage applies.
You work hard to build your financial security. A serious liability claim shouldn’t put everything you’ve built at unnecessary risk.
Umbrella Insurance can provide an additional layer of liability protection above certain underlying policies, helping you prepare for the financial consequences of eligible claims that exceed your primary insurance limits.
SecureWay Insurance can help you review your existing liability coverage and explore whether additional umbrella protection may be appropriate for your circumstances.
Umbrella insurance coverage, limits, premiums, deductibles, underlying insurance requirements, exclusions, eligibility, and claim procedures vary by insurer, policy, location, and individual circumstances. This page is provided for general informational purposes only and does not guarantee coverage or benefits. The applicable insurance policy and endorsements control the actual terms of coverage.