How Personal Umbrella Insurance Works

Jackie Quinn
by Jackie Quinn, Director, Underwriting Operations, Main Street America Insurance •

Umbrella insurance is an added layer of protection in addition to any coverages provided by your homeowners or auto insurance policies. What does that mean? While an umbrella insurance policy is optional, it can provide much-needed protection should a situation arise where your usual coverage amounts are not enough to cover losses.

What Does Umbrella Insurance Cover?

Part of what makes an umbrella insurance policy so great is that it provides broader coverage for a variety of potentially costly claims, including:

Personal Injury

Personal injury protection covers your legal fees in the event of situations like wrongful arrest, libel or slander, or accusations of defamation of character. For example, if you have a bad experience with a new lawn service and leave a negative review that leads to a defamation lawsuit, your umbrella coverage will kick in to help pay for your defense.

Bodily Injury

With umbrella insurance, your bodily injury coverage includes increased help with medical bills, loss of income and even funeral expenses should someone be injured in an accident you cause. Imagine you’re responsible for an accident on the highway. Your standard auto policy may not be enough to cover the loss, but umbrella coverage will help cover any claims so you aren’t burdened with unexpected expenses.

Property Damage

The property damage protection you get from umbrella insurance helps pay for losses when you are responsible for damage to someone else’s personal property. For example, if your car slides on ice while backing out of your driveway and you hit your neighbor’s car, your umbrella policy will help pay for the excess damages beyond what your standard policy covers.

While umbrella insurance is helpful and provides extensive protection, it’s important to remember that it does not cover everything. Umbrella policies do not include crimes or intentional damages, business coverage, or protection for your personal property.

How Umbrella Insurance Protects You

Let’s take a closer look at how personal umbrella insurance works to protect you.

If you have a car insurance policy with liability coverage up to $300,000 and you’re in an at-fault accident, your auto policy will cover any damages to the other driver and vehicle up to that $300,000 limit.

But what happens if the vehicle you hit turns out to be pretty pricey and the other driver is severely injured? With an umbrella insurance policy, you can expand that coverage beyond $300,000 to help your insurance coverage go further and help protect your personal assets.

Now let’s say that your umbrella policy has a limit of $1,000,000. That provides you with an additional $1,000,000 to cover the costs to repair or replace the vehicle you hit, pay medical expenses for the other driver and his or her passengers, and pay to replace any lost wages resulting from their injuries.

With the right umbrella coverage in place, you would be spared from potentially devastating out-of-pocket costs resulting from the accident.

How Much Umbrella Insurance Do I Need?

The amount of umbrella insurance you need depends on a variety of factors, like your risk or any gaps in your existing homeowners and auto coverage. The best way to decide if, and how much, personal umbrella insurance is right for you is by speaking with an independent insurance agent.

The Cost of Umbrella Insurance

Like the amount of coverage you need, the cost of umbrella insurance varies depending on factors like the area you live, the coverage amounts you choose, and more. Regardless, the premiums you pay will be far worth it for the out-of-pocket expenses you’ll avoid if the unthinkable happens.

Find a Main Street America independent insurance agent near you today to learn more or to get set up with a personal umbrella insurance policy.