Even if your homeowners insurance and auto insurance provide solid liability protection, there are situations where these policies may not fully cover the costs of lawsuits, settlements, or judgments. That’s where personal umbrella insurance—also called excess liability insurance—comes in.
Personal umbrella coverage provides an additional layer of protection for your personal assets when your underlying liability limits are exhausted. This coverage is essential for anyone who wants to safeguard their home, savings, investments, or other valuable assets against large or unexpected liability claims.
Why Personal Umbrella Insurance is Important
No matter how careful you are, accidents and unexpected events can happen. Catastrophic incidents—like severe auto accidents, serious injuries on your property, or major property damage—can result in multiple or unusually large liability claims.
Without personal umbrella coverage, you could be personally responsible for paying the excess costs, which can quickly escalate into financial devastation. An umbrella policy helps protect you from:
- Large judgments or settlements exceeding your primary insurance limits
- Legal fees associated with defending lawsuits
- Liability claims for bodily injury, property damage, or personal injury
- Claims that might not be fully covered under homeowners or auto policies
How Personal Umbrella Coverage Works
- Underlying policies first: Your personal umbrella policy only activates after your homeowners, auto, or other liability policies have reached their coverage limits.
- Excess liability protection: Once your primary insurance is maxed out, the umbrella policy covers additional costs, up to the policy limit.
- Broad coverage: Many personal umbrella policies include coverage for incidents not typically covered by standard liability policies, such as defamation, libel, slander, or certain personal injury claims.
Most personal umbrella policies start at $1 million in coverage and can be customized up to $10 million or more, depending on your risk exposure and financial situation.
