Umbrella Insurance Policies: Should you have one?

February 12, 2019 | Theodore J. Madison

What is Umbrella Insurance?

Personal umbrella insurance is a type of insurance policy designed to add extra liability coverage over and above another insurance policy, such as auto, boat, or homeowners.

The extra coverage applies when the liability limits of the above policies have been reached.

It also provides coverage for claims that may be excluded under other liability policies.

What is Covered?

Umbrella insurance typically covers:

  • Bodily Injury claims arising from automobile accidents that are your fault, e.g. your dog biting someone, slip and falls in your home or injury to a third party occurring at your home;
  • Property damage to another’s tangible property arising from an automobile accident, your dog damaging another’s property and damage caused to another by your child;
  • Liability claims against you as a landlord;
  • Libel and/or slander actions against you;
  • False arrest or detention allegations against you;
  • A claim against you for malicious prosecution;
  • A claim against you for shock or mental anguish.

An example of how umbrella insurance works:

If your auto policy has limits of $500,000 and you are involved in an accident that is your fault where damages exceed your policy limits.  If you have an umbrella policy, it will cover the excess claim up to the umbrella policy’s limits.


Umbrella policies are usually sold in $1 million increments to stack on your existing auto, boat or homeowners policies.

Damage awards are ever increasing and people generally do not carry enough coverage for a catastrophic claim.  So the answer is yes, get yourself an umbrella policy to cover your assets.


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