Understanding Umbrella Insurance

Umbrella insurance is a type of liability coverage designed to provide extra protection beyond the limits of your existing home, auto, or other liability policies.

How it works:
Let’s say you’re found legally responsible for an accident that causes $750,000 in damages, but your auto policy only covers $500,000. Without umbrella insurance, you’d be responsible for the remaining $250,000 out of pocket. With umbrella coverage, your policy would step in to cover that extra amount (up to your umbrella policy limit).

Key points to know:

• It’s not a stand-alone policy. Umbrella insurance works as an extension of your existing coverage.
• It covers more than just physical damage. This can include legal fees, medical bills, property damage, and even certain lawsuits such as defamation or slander (depending on your policy).
• It’s about protecting your assets and future. If a claim exceeds your primary coverage, your savings, investments, and even future wages could be at risk without umbrella coverage.
• Coverage is often very affordable. Many people are surprised at how inexpensive it is for the amount of protection it provides—often $1 million or more.

In short: Umbrella insurance is financial protection for major, unexpected events that could otherwise cause serious financial hardship. It’s not just for the wealthy—anyone with assets or income to protect can benefit from it.