What is an Umbrella Policy?


When you pop open  an umbrella on a rainy day, what happens? It reaches out over your head   and shoulders to direct rain away from you and protect you from getting wet. An umbrella   insurance policy works much the same way with liability protection. Umbrella policies offer an additional layer of liability protection. Homeowner’s insurance and auto insurance policies provide liability coverage, but it may not be enough depending on your situation and assets. An umbrella policy is in most cases an inexpensive way to provide additional liability coverage, typically up to $5,000,000¹. Umbrella policies do require you to keep certain limits of liability on all underlying insurance policies. The underlying policy must payout first and exhaust its limits before the umbrella policy will pay.

If your net worth exceeds the limits of liability on your home or auto policy, then you probably should   look into purchasing an umbrella policy. Additionally, if you have youthful drivers in your home, you should consider an umbrella policy.  Umbrella policies do not cover all types of liability cases. For instance, a personal umbrella policy typically won’t cover liability exposures arising from a professional or business exposure.

Reach out to one of our agents today to answer any additional questions you may have, or to see if an umbrella policy might be a need for your family’s situation.


¹Sarah Schlichter. NerdWallet. Sept. 20, 2021. “What Is Umbrella Insurance, and How Does It Work?” https://www.nerdwallet.com/article/insurance/umbrella-insurance. Accessed Aug. 1, 2022.

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