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Trustedchoice.com
March 25, 2021
Umbrella Insurance

How this quote will help me?

Your quote is based on several common factors to give you a clear picture of the cost you can expect, though an independent agent can shop around and maybe even improve your rate!


NOTE: This quote is not final, though we did work with professional actuaries to help get you a ballpark figure to get started.

Simply put, personal umbrella insurance pairs up with family policies like home, auto, or boat insurance. Business or commercial umbrella insurance pairs with your business's general liability or commercial auto insurance. 

Unless you can predict the future, you really never know if you need umbrella insurance, but if you're exposed to a large amount of liability risks, it's definitely an important coverage to consider. If your home has potentially dangerous hazards and your speed boat loves to chop up the waters, then umbrella insurance is probably a good idea. 

The extra padding of liability protection will always help you sleep at night, and if something unexpected ever happens, it will help minimize the financial damage to you and your family.

Since you never know what could possibly happen tomorrow, your best option in determining your coverage is to work with an independent insurance agent. They'll be able to help assess your situation and all risks associated with your life to lay out the best coverage options for you.

Many families find the popular $1 million in additional liability coverage more than enough, while others will require much more.

No. Natural disasters relate to property damage, not liability, and umbrella insurance only focuses on that side of protection. If you do need natural disaster property coverage, your independent agent can work with you to find the best course of action.

Your umbrella insurance is an extra buffer of coverage on top of the policy it corresponds to. If you're in a car accident, your auto insurance will protect you up to the limits of your coverage and umbrella insurance will kick in on top of that.

As far as the action steps you take after an incident, you'll simply file a claim. Your insurance company will hire a lawyer on your behalf to guide you through the litigation, and then you'll be reimbursed accordingly. Very simple really.

Yes, umbrella insurance can be paired with rental property insurance for landlords. This is definitely a good idea if you operate a larger rental unit with multiple families and tenants involved. Your umbrella will just attach itself to your landlord insurance and protect and pay out in the same manner as if it were your own personal property.

That depends. Umbrella coverage increases liability coverage limits, but if your assets are damaged by other causes, like fire, vandalism, or floods, you'll need separate coverages. 

UMBRELLA INSURANCE

UMBRELLA INSURANCE

Find the perfect agent to shop multiple insurance companies on your behalf, saving you time and money.

It should be no surprise how important it is to have your home, car, or even your business protected with the right insurance. But sometimes your risks outweigh the coverage you have. When that's the case, it's important to consider umbrella insurance to tack on an extra layer of liability protection in case of an accident. One unexpected accident could be all it takes to surpass your current liability and leave all the costs remaining on your plate.

An independent insurance agent can help you get set up with all the umbrella coverage you need. They’ll help you anticipate your legal risks ahead of time and get you equipped with the right protection to leave you feeling secure. 

What Is Umbrella Insurance?

Umbrella insurance, also called excess liability coverage, is a separate insurance policy that acts as a liability “umbrella” that extends over an underlying insurance policy, like your businessautohomemotorcycle, and boat policies. It’s a liability-only policy, meaning there is no physical damage coverage for anything. It simply extends your underlying policy's liability limits in the event of a large claim.

Most insurance companies offer umbrellas in million-dollar increments, starting at $1 million and ending at $5 million, though some offer a lower limit, like $500,000 or even a higher limit, over $5 million. When you speak to your independent agent, they'll be able to guide you to what's best for you, and handle all the heavy work to find it for you.

How Does Umbrella Insurance Work?

Umbrella insurance covers costs of lawsuits, settlements, and legal defense, as long as the reason for the lawsuit is covered by your policy. However, umbrella insurance can even sometimes cover certain types of lawsuits that aren't covered by your homeowners, business, or auto insurance.

Here's a breakdown of umbrella coverage on top of an auto insurance policy:

Umbrella Insurance

So, if you had an auto insurance policy that provided $300,000 in liability coverage and then added a $1 million umbrella policy, you'd have increased your liability protection all the way up to $1.3 million total. The good news is, umbrella policies tend to be highly affordable. Especially considering the generous amount of added protection they offer. 

What Does Umbrella Insurance Cover?


      
   
    
 
    
 
   
    
   
   
     
  
     
 
 

Umbrella insurance usually covers: Umbrella insurance usually doesn’t cover:
Others’ treatment for injury and funeral costsYour own injuries
Others’ property damageDamage to your personal belongings
Lawsuits involving slander, libel, defamation of character and other personal attacksOthers’ injuries or property damage that your business is liable for
Your legal defense costsIntentional or criminal acts

An umbrella policy is designed to extend liability protection included in other types of insurance. Personal umbrella policies are most commonly paired with homeowners insurance, auto insurance, or watercraft insurance, and business umbrella policies are paired with general liability coverage under business insurance or commercial auto insurance.

Just as a regular umbrella protects you against harsh weather, umbrella insurance protects you against harsh legal consequences. 

What Does Umbrella Insurance NOT Cover?

Umbrella policies aren’t standard across the country. This means your policy could look quite a bit different from your neighbor's. However, there are a couple of common exclusions in umbrella policies, such as the following.

  • Certain out-of-pocket expenses: Umbrella policies come with a “self-insured retention,” which is the amount the policyholder must pay if a claim isn't covered by their underlying policy. If a claim was covered by your umbrella insurance but not your auto, you’d have to pay this amount, often $1,000, before your umbrella coverage would cover the rest.
  • Non-liability related disasters: Umbrella insurance is only designed to cover excess legal fees. So your coverage won’t protect you against property damage claims that exceed your homeowners insurance policy limits.
  • Your own injuries: Umbrella policies don't cover personal injuries, no matter which policy they're paired with. You'd need health insurance for that.

One of the primary roles of an independent insurance agent is to make sense of your insurance. They'll work with you to help make sure you understand the coverages and non-coverages in good detail so you know what you are and are not covered for.

Do I Need Umbrella Insurance?


 
  
    
      
   
 
 
    
   
    
 
    
 
   
 
 

Umbrella Insurance Pros:Umbrella Insurance Cons:
Provides extra liability coverage and legal defense costs once the limits of your auto, home or business insurance have been exhausted.You must already carry auto or property insurance, usually homeowners, to qualify.
Covers incidents your primary insurance may not, like libel and slander.You're required to buy a minimum amount of auto and/or property insurance liability coverage before you can add umbrella coverage.

Your umbrella policy is there to help protect you against unforeseen, expensive legal troubles. Here are a couple of common scenarios where umbrella insurance is critical.

  • Car accidents: Whether you hurt someone else with your vehicle or damage their property, lawsuits following car accidents can get pricey, fast.
  • Dog bites: Dog bites can be some of the most expensive legal claims filed against homeowners, with an average cost in 2019 of $44,760.
  • Guest or customer injuries: Accidents on floors, stairs, and sidewalks are common and costly lawsuit when filed against homeowners and businesses. Without additional protection, you could be in even more trouble.

How Much Does an Umbrella Policy Cost? 

Most insurance companies offer $1 million umbrella policies priced somewhere between $150 and $300 per year. For an additional $1 million dollars in coverage, you'd add about $75 to your annual premium, and another $50 per year for each additional increment of $1 million. The cost of premiums directly relate to your specific personal and business risk exposures. 

The largest cost factors include the following

  • Owning rental properties or second homes
  • Owning more than two vehicles
  • Owning a boat, motorcycle, camper, or ATV
  • A driving record with accidents or violations in the last three to five years

Your Independent Insurance Agent Has Your Answers

Whatever you need, your agent has your back. With a brief intro into the terms, discounts, and process of your umbrella insurance, you know the kinds of questions to be asking. Your agent will ask you all about your liability needs and goals to help find the perfect blend of coverage at the right cost for you.

Best Umbrella Insurance Companies

Travelers
westfield insurance
Nationwide
foremost insurance group
state auto insurance companies
progressive insurance company
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