Protection From Life’s Storms: The Personal Umbrella Policy


If an accident happens on your property—or even if your children or your pet cause another person to be injured on your property or away from home—you could be sued and held responsible for the damages to the other party. Are you sure you will have enough liability coverage to cover the costs of any risks you and family may face each day? It is for this reason that you should consider a personal umbrella policy.

Personal Umbrella Liability Basics

You more than likely have some liability coverage under your homeowners, car, or boat insurance policies, but the cost of property damage, injuries to others, and lawsuits can easily exceed the limits of those policies. If you are sued, you could be forced to pay a legal judgment that could decimate your current assets and future earnings.

Personal umbrella policies provide extra liability insurance that helps protect you from major claims and lawsuits beyond the limits of your other insurance policies. Umbrella policies typically provide an additional $1 to $5 million in liability protection after the limits of your other policies have been reached.

Umbrella insurance provides coverage for injuries, damage to property, certain lawsuits and other personal liability situations above and beyond the limits of your other personal insurance policies. It may even provide coverage for things that are not covered at all by other policies. It is an extra layer of defense over your standard liability policies.

Who Needs Umbrella Insurance?

Anyone who owns a home or has other assets that they need to protect should consider an umbrella policy. Consider how easy it would be for any of the following to happen. For example what if:

• Your Teenager Runs A Stop Sign, Causing A Serious Accident?
• A Guest Falls On Your Sidewalk And Is Seriously Injured?
• A Babysitter Is Injured By Your Otherwise Friendly Dog?
• Someone Is Injured At Your Rental Property?

These are just a few examples of situations where you might need personal umbrella insurance. What’s more, umbrella insurance may also provide protection for you if you are sued for slander or defamation of character. This may seem unlikely, but as more and more of us choose to make our opinions known online, cases of people being sued for making disparaging remarks about someone online or writing a negative review about a business are growing too. Even if you win such a case, the legal expenses alone could be financially devastating. Umbrella insurance can provide coverage for these expenses.

Don’t assume that because you are not a “millionaire” that you do not need umbrella insurance. Most of us have more to lose than we might think. If a guest falls down the stairs at your house and is injured, your retirement funds, investments, savings and even future earnings could be at risk. In some states, even the equity in your home can be part of a legal judgment against you.

Fortunately, personal umbrella insurance is quite affordable, especially considering the peace of mind and additional protection it offers. Depending on the policy value and your personal risk factors a $1 million umbrella policy typically costs $200 annually. Costs go up an additional $50-$75 each million thereafter.

Remember that umbrella policies are considered secondary insurance (they kick in only after the liability limits on your other applicable insurance policies have been reached). You must have a certain amount of auto and home liability coverage in order to purchase umbrella insurance. The typical minimum requirements are:

• Auto Insurance Bodily Injury Coverage Of $250,000 Per Person And $500,000 Per Accident
• Auto Insurance Property Damage Coverage Of $100,000 Per Accident
• Home Insurance Personal Liability Coverage Of $500,000

Have you considered umbrella insurance as part of your personal insurance portfolio? We can help you assess your risks and your need for umbrella liability coverage. Call Watkins Insurance Group today to discuss your unique needs and learn about our liability insurance solutions.

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