What is Umbrella Coverage? Why you really should have it for your family.


So what is it?


An umbrella insurance policy is extra liability insurance coverage that goes beyond the limits of the insured's homeowners, auto or watercraft insurance. It provides an additional layer of security to those who are at risk of being sued for damages to other people's property or injuries caused to others in an accident.



What is covered under an umbrella insurance policy?


A personal umbrella policy provides two types of coverage: liability and defense costs.


Umbrella policies can cover what primary insurance excludes and/or additional coverage beyond the limits set in your other insurance. Umbrella policies can provide excess liability for auto, homeowners, boat, and renters' insurance.



Is your primary insurance enough to completely cover you and your assets?


What would happen to your home, business, and family if you were sued for a significant liability charge? Luckily, an umbrella policy can step in when your other coverage isn’t enough. Umbrella insurance can provide additional coverage if you face costs due to a liability claim.


A personal umbrella policy provides two types of coverage: liability and defense costs. Umbrella policies can cover what primary insurance excludes and/or additional coverage beyond the limits set in your other insurance.

It covers in a variety of situations if you’re held responsible for bodily injury, property damage, or personal injury. This means that you’re found at fault or negligent for someone else’s injury or damage. Your umbrella coverage can help pay for these liability-related costs.


Umbrella policies can provide excess liability for auto, homeowners, boat, and renters insurance. Typically, one umbrella policy can be applied to all if you already have these policies bundled.


Umbrella policies do not cover physical property damage. This means that damage to your own home or vehicle would not be covered by your umbrella insurance. If someone steals everything in your house or a hailstorm totals your car, umbrella policies will not step in as coverage. Those situations typically fall under specific riders or policies in your homeowners’ or auto coverage.


So what does personal umbrella insurance cover? What are the common claims that would fall under umbrella coverage?


1. Defense costs


If someone sues you, you typically have to pay lawyer fees and processing expenses. These costs can quickly add up, even totaling hundreds of thousands of dollars for a single trial.


Umbrella coverage can step in to pay these fees as you defend yourself in court.


If you are found at fault, the remainder of umbrella coverage not used for defense costs may then help pay for the associated liability expense you owe.


2. Teen drivers


If you have a teen driver on your auto policy, you’ll likely want additional umbrella coverage. You are required to hold auto liability insurance by law, but it may not always be enough in the case of a serious accident where you (or your teen driver) are found at fault.


Unfortunately, the crash risk is 3x higher for 16-19 year olds, and teens account for about 8-10% of fatal crashes every year. This creates high risk—and high liability. Adding umbrella coverage boosts your auto liability limit to protect against these increased risks.


Plus, a teen driver typically raises your insurance premium. Having an umbrella policy is a great way to get additional coverage at a lower cost than adding that line of liability on your primary auto insurance.



3. Parties


You host a party at your house. One of your guests drinks too much. He decides to drive home intoxicated. He causes an accident on his way home from your party. Depending on the state you live in, you could be partially liable for his expenses. One of the most surprising and expensive liability claims people find themselves in is indirect liability. Umbrella coverage can help protect against this when homeowners’ likely wouldn’t.


4. Dog bites


You take your dog out for a walk, and another dog spooks him. He and the dog get into a fight, and your dog bites that dog. He also bites the other dog’s owner, who is trying to pull the dogs apart. If your dog bit first, you could be on the line for medical expenses, lost wages, and even pain and suffering. These may not be covered by homeowners' insurance, so umbrella coverage could step in to pay for the costs.


5. Homeowners' liability


Umbrella coverage can raise your limit for the liability on your home and property as well. You have a birthday party for your son and his friend falls off the trampoline. You lend your lake house to a friend for the weekend and they get injured. A tree in your yard falls over and crushes your neighbor’s car. You’re liable for all of these sorts of incidents.


These are typically covered under your homeowners liability insurance. However, if the cost is greater than your homeowners insurance limit, umbrella insurance can offer additional coverage.


6. False arrest and slander


Umbrella insurance is there to help you defend yourself in the case of false arrest, imprisonment, defamation, or eviction/malicious prosecution. It can also help pay for you to regain your reputation and fight back in certain cases as well.


Umbrella insurance is typically the only insurance that will cover these kinds of situations.


7. Pain and suffering


If you are found at-fault for some sort of incident, you can also be sued for “pain and suffering.” This is an additional cost outside of the person’s bills and expenses that relates to the psychological stress that resulted as a cause of the incident.


Pain and suffering is one of the costliest liability expenses. It can be hundreds of thousands if not millions of dollars in some cases. Umbrella insurance can help cover these costs.


8. Volunteering


If you’re active in your community, you want extra liability coverage. Someone that you serve through a charitable or religious organization can come after you for negligence or inappropriate behavior. Although some charitable organizations will help pay for this, the individual can still come after you directly.



An umbrella policy is an inexpensive way to help protect yourself against significant claims that could destroy your finances and your lifestyle. To learn more speak with one of the five star team members at CH Insurance. We're in your corner!