Umbrella Insurance – It Keeps You Covered

May 11, 2022

Whether you are held responsible for a serious auto accident or an injury on your property, you can quickly find yourself responsible for damages that exceed the liability limits on your home, auto, renters, or boat policy. An expensive judgment could mean financial ruin for many people. Fortunately, there’s an option to help protect your assets and provide additional protection – umbrella insurance.

An umbrella insurance policy provides an extra layer of protection in the event the coverage limits on your primary insurance policies are exhausted. Personal umbrella policies typically offer between $1-5 million of liability coverage and, depending on the coverage amount, are relatively inexpensive, oftentimes costing less than a plane ticket.

For Example

Suppose you were involved in an accident that resulted in serious injuries to the other driver and their passengers. You are found to be at fault, subsequently sued, and the lawsuit resulted in a judgment as shown below: 

Judgment Amount
Auto Liability Limit
(maximum payout on the policy)
Gap in Coverage
(what the at-fault driver owes)


In this situation, your auto coverage maxed out at $500,000, leaving you with the remaining $1,000,000 bill. If you are not able to pay the remaining amount, your personal assets (money in the bank, personal property, investments, etc.) could be at risk. However, if you have an umbrella policy with a limit of at least $1,000,000, it would help avoid the gap in coverage.

An umbrella policy is there for you when the unexpected happens. You could be held liable to others for the cost of damages – injuries, property destruction, emotional distress, lost wages, and more. It only takes one serious accident and a resulting lawsuit to put everything you own (and will own) at risk.

*Actual coverage is subject to the policy as written. Higher limits may be available depending on the insurance company and underwriting approval.