Umbrella Coverage

What is umbrella insurance? (source: Insurance Information Institute)
 If you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage, paying for judgements against you and your attorney's fees, up to a limit set in the policy. However, in our litigious society, you may want to have an extra layer of liability protection. That's what a personal umbrella liability policy provides. See our Insurance Glossary for a list of common terms.

An umbrella policy kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy. It will also cover you for things such as libel and slander.

Because the personal umbrella policy goes into effect after the underlying coverage is exhausted, there are certain limits that usually must be met in order to purchase this coverage. Most insurers will want you to have about $250,000 of liability insurance on your auto policy and $300,000 of liability insurance on your homeowners policy before selling you an umbrella liability policy for $1 million of additional coverage.


Why do you need umbrella insurance?
Personal umbrella insurance provides extra protection beyond your standard insurance policies. Additional personal umbrella protection is becoming a must-have for more and more insurance customers. Today, the threat of personal financial ruin from damaging lawsuits looms larger than ever. Without proper umbrella coverage, you could lose your home, savings, retirement and future earnings.

Umbrella coverage provides another layer of defense by:

• Increasing liability coverage amounts above existing personal insurance coverages.
• Adding coverages that might not be included with your current homeowners or auto policies.

Umbrella coverage may also offer extra coverages that might not be included in your current policies. These coverages include worldwide protection against:

• False arrest, false detention, false imprisonment or malicious prosecution.
• Libel, slander or defamation of character.
• Invasion of privacy, wrongful eviction or wrongful entry.

Additional Information
the balance- Questions Asked to Obtain an Umbrella Policy