Umbrella Insurance

Quick Look

  • Umbrella insurance is a kind of liability insurance above and beyond other liability insurance you may already have.
  • Umbrella insurance is a good idea for most people, but it’s especially important for some people.
  • Umbrella insurance isn’t particularly expensive.


<< Understanding Basic Insurance Needs

Extra Protection is Worthwhile

Umbrella insurance adds liability coverage in the event you or a family member is sued or in some way liable for someone else’s costs from an accident. While you may already have some form of liability coverage via a home, renters, or auto insurance policy, it may not be enough to cover all your expenses. For example, if you (or your teenager) cause an accident that involves multiple cars, while your auto insurance liability would kick in first, if it wasn’t enough to cover all the cars, an umbrella policy would kick in. 

In other instances, your other liability coverage may not cover any expenses. For example if you were involved in a skiing accident your umbrella policy might be the only option available. 

Umbrella insurance can provide an extra layer of liability protection for your whole family.

Who Needs Umbrella Insurance?

While umbrella insurance could be useful for anyone who might be sued (which is just about everyone), it may be particularly important for the following:

  • Landlords
  • Parents (and dog owners)
  • Public figures
  • Property owners with “risky” home features like pools or trampolines

Umbrella Insurance is Pretty Cheap

Finally, given that umbrella insurance isn’t typically the only form of liability coverage, it’s generally priced very reasonably. According to the Insurance Information Institute, “For about $150 to $300 per year you can buy a $1 million personal umbrella liability policy. The next million will cost about $75, and $50 for every million after that.” For most, this is a reasonable price to pay for the added peace of mind that comes with protecting your financial assets.

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