Umbrella insurance kicks in when liability exceeds what other insurances will pay up to an amount defined by the policy. For example if your policy covers $1 million and you are sued for $2 million your umbrella policy will pay the difference after the first insurance pays up to it’s liability limit. This applies to lawsuit related claims, not personal property damage, theft, or personal health insurance claims.

Umbrella Policy Adds Extra Liability Coverage

As explained above the main feature of umbrella insurance is liability beyond what your other insurance will cover. In some instances it will cover liability excluded from other policies as well. Given this umbrella policies are typically only offered if you obtain and maintain auto, home, and umbrella policies through the same company. Umbrella policies have their dollar limits as well. Luckily there are all sorts of umbrella policies so you can pick the dollar limits that are right for you.

Personal Umbrella Insurance Can Cover Limits Above the Liability of:

  • Auto insurance
  • Home owners insurance
  • Renters insurance

It can also cover liability on other things like boats.

Personal Umbrella Insurance Won’t Cover:

  • Personal health insurance claims
  • Personal property damage

And pretty much anything not relating to a lawsuit