Personal Umbrella Insurance
What Is a Personal Umbrella Insurance Policy?
A Personal umbrella insurance policy is an extra layer of liability insurance coverage that goes beyond the limits of the insured's auto, homeowners, landlord, motorcycle or watercraft insurance policies. It provides an additional layer of security to those who are at risk of being sued for damages to other people's property or injuries caused to others in an accident. It also protects against libel, vandalism, slander, and invasion of privacy.
- An umbrella insurance policy is a type of personal liability coverage that goes above and beyond the amount that regular auto or home insurance offers.
- To purchase umbrella insurance, you must purchase an auto, homeowners, landlord, motorcycle or watercraft policy first; the umbrella policy kicks in after the regular coverage has been exhausted.
- Candidates for umbrella insurance include people who possess assets or potentially hazardous things, or who engage in activities that could increase their risk of being sued.
How a Personal Umbrella Insurance Policy Works
The added coverage provided by a personal umbrella insurance policy is most useful to individuals who own a lot of assets and are at risk of being sued.
The policyholder who wants to purchase a personal umbrella insurance policy is required to carry a minimum amount of insurance coverage such as $100,000/$300,000 bodily injury/$100,000 property damage for auto, motorcycle or watercraft insurance and $300,000 for homeowners or landlord insurance.
People who regularly purchase umbrella insurance will usually own property or have significant savings. They may own dangerous things that can cause injury (swimming pools, trampolines, dogs, etc.).
They might also engage in activities that increase their chances of lawsuits, such as:
- Being a landlord
- Serving on the board of a nonprofit
- Regularly posting reviews of products and businesses
- Participating in sports where you could easily injure others (skiing, surfing, hunting, golf, etc.)