What is umbrella insurance?

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Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in...

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Chris Harrigan has an economy degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise...

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Reviewed byChris Harrigan
Former Insurance Claims Managerhttps://res.cloudinary.com/quotellc/image/upload/insurance-site-images/cicompaniescom-live/1f43458a-chris-harrigan23.jpg

UPDATED: Feb 25, 2019

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Key takeaways...
  • Umbrella insurance is an optional form of insurance coverage, which can add to your policy
  • Umbrella insurance provides an extra layer of coverage
  • It’s easy to add umbrella coverage to your existing policy

Umbrella insurance is an optional form of insurance coverage, which exists outside of your standard car insurance policy. In today’s world, having some form of umbrella insurance is a must for many consumers.

Although almost everyone has insurance tied to an asset such as auto insurance coverage or homeowners insurance.  It’s possible you might just need coverage beyond the maximum limits of these policies and this is where umbrella insurance comes in.

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What is umbrella insurance?

Many times, the maximum coverage under an auto insurance policy is $300,000.

While the odds of causing a fatality behind the wheel are extremely low do you really think $300,000 is enough if the family members of the deceased retain a good lawyer?

Hardly, judgments awarded can easily surpass seven figures and you could be held personally liable for the rest.

Umbrella insurance was created to provide an additional layer of liability protection above and beyond limits of standard insurance policies.

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Consumers can easily find policies which have very generous limits of coverage (up to $5 million+) for a nominal cost.

If you are subject to a liability claim the umbrella insurance coverage will kick in once any existing policy coverage is exhausted.

In fact, there are many elements to umbrella insurance where consumers will also get coverage for items which they may not have existing coverage currently in place for.

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How much is umbrella insurance?

Umbrella insurance premiums will range from one company to a next but generally are well under $1,000 per $1,000,000 of coverage.

For anyone self-employed or driving a luxury vehicle, umbrella insurance should be seriously considered as extra liability protection.

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References:
  1. https://www.geico.com/homeowners-insurance/
  2. https://northeast.aaa.com/insurance/additional/umbrella-insurance.html
  3. https://www.progressive.com/umbrella-insurance/umbrella/
  4. https://www.libertymutual.com/auto/car-insurance-coverage/bodily-injury-liability

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