What Is an Umbrella Insurance Policy?

By Susanne Wickham-Cook, Personal/Commercial Lines Agent

Here at Wickham Financial & Insurance Services, we get a lot of questions about umbrella insurance policies, so I wanted to share some information in hopes it will help answer them.

Personal umbrella coverage is liability coverage that can benefit anyone. It gives you extra liability above your other personal insurance policies. Namely, it can protect you against large and potentially devastating liability claims or judgments that could be brought against you.

If you are held liable for something, it comes into play when the underlying limits on your other policies have been reached. When those limits have been exhausted, you would be able to file under your umbrella liability coverages.

Having this umbrella policy will prevent you from having to pay out of your pocket for another person’s medical bills, legal bills, or any other bills you are being held responsible for in the claim. It will also extend to other members in your home that do not have auto or home insurance in their own name. It’s the kind of thing that can really give you peace of mind.

The amount of coverage provided by an umbrella policy varies, but it typically ranges from $1 million to $10 million, or more. The cost of the policy depends on factors like the amount of coverage, your personal risk factors, and where you live.

Personal umbrella insurance coverage can provide valuable protection for individuals who have assets to protect and want to safeguard against the risk of financial ruin in the event of a lawsuit or claim.

For example, an umbrella policy can cover you if you are held liable for something your child or a pet has done, just the same as if you are involved in an automobile accident and held liable.

An umbrella policy is going to be a completely separate policy from your auto and home policies, and usually, the cost is pretty modest. It’s not a really expensive item to purchase when you consider the amount of coverage that you’re going to be getting and the protection it provides for you and your family.

I hope this gives you a better idea about what umbrella coverage is and how it could benefit you. If you have any further questions about this or just want additional information, please feel free to contact us.