Umbrella insurance provides additional liability coverage above your homeowners or auto insurance limits. It protects your assets from major legal claims and lawsuits. While homeowners and auto insurance may cover up to $500,000, lawsuits can sometimes exceed $1 million, so umbrella insurance covers the difference. Both individuals with high net worth and those earning a steady income should consider umbrella insurance to protect their assets and future earnings. An insurance agent can help determine how much excess liability coverage is appropriate based on your net worth, income, property, and risk tolerance. However, a personal umbrella policy does not cover business-related liabilities or possessions.

1. Umbrella Insurance FAQs

2. Q: What is umbrella insurance?

3. Personal umbrella insurance, also known as
excess liability insurance, offers extra liability
insurance. For example, in the event that your
homeowners insurance or auto insurance liability
has been maxed out, then umbrella insurance has
you covered. It’s designed to protect you and your
assets from major claims and lawsuits. Umbrella
may also cover you in the event that you’re sued
for slander, libel, false arrest. Visit our blog for
more information on umbrella insurance policies.
What is umbrella insurance?
A:

4. Q: I already have $500,000
liability limits on my
homeowners insurance and
my auto insurance, why do I
need an umbrella policy?

5. An umbrella policy kicks in when the limits of
your existing property, car, boat or motorcycle
insurance have been exhausted. It’s not at all
uncommon for liability lawsuits to result in
judgments in excess of $1 million, an umbrella can
cover the difference between your policies.
I already have $500,000 liability limits on my
homeowners insurance and my auto insurance, why
do I need an umbrella policy?
A:

6. Q: Who needs umbrella insurance?

7. In today’s litigious environment, an umbrella
policy is a good idea not only for individuals with
a high net worth, but also for those who are
earning a good, steady livelihood. For those with
a high net worth, an umbrella policy protects
their assets. For those with more modest assets,
a personal umbrella policy protects their future
earnings as well as their current assets.
Who needs umbrella insurance?
A:

8. Q: How much liability coverage
do I need?

9. There’s no one-size-fits-all answer to this
question. Discuss the value of your assets, income,
property, existing financial obligations and risk
tolerance with your insurance agent to determine
your net worth and to establish an appropriate
level of excess liability coverage for you and your
family.
How much liability coverage do I need?
A:

10. Q: Does my umbrella policy
cover my business?

11. No, a personal umbrella policy does cover
personal liability issues that may stem from your
business or profession. Nor does your policy
cover your possessions, contracts, or intentional
criminal acts.
Does my umbrella policy cover my business?
A:

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