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Umbrella Insurance

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What is umbrella insurance?

Umbrella insurance provides additional liability coverage — over and above the limits on your auto and other personal liability policies. This extra protection is available in $1 million increments up to $10 million. And $1 million of coverage can cost less than $1 a day.

It’s an affordable way to keep an extraordinary event from becoming a financial life-changer. Consider: The average jury award for auto accidents involving bodily injury and property damage exceeds $300,000. Liability awards for accidents in the home can be just as substantial.

Here are some of the ways an umbrella policy can help when covered events threaten your financial security:

Your son causes a car accident

While away at college, your 19-year-old son causes an accident that seriously injures a tech company’s top executives. Your auto insurance liability limits may not be high enough to cover their medical expenses and lost income while they recover.

Your injured guest needs ongoing care

A guest at the pool party you’re hosting slips on your diving board and falls onto a stone-paved deck. She’ll be okay — but will need back surgery and ongoing rehab. The cost of this care will exceed the limits of your homeowners policy.

Your injured friend can’t work

Your friend trips and falls over a toy left in the middle of a hallway by your young son. She won’t be able to work for some time, and the liability limits of your homeowners insurance may not be high enough to cover her medical bills and other compensation.

You flood your downstairs neighbor

You forget you left your bathtub running when you get distracted while checking for mail in your apartment building’s lobby. While you’re gone, the tub overflows — deluging your downstairs neighbor’s home office. Renter’s insurance won’t cover the full costs of damage to her property and business.

What does umbrella insurance cover?

A standard umbrella policy provides additional liability coverage for:

  • Your primary residence
  • Two motorized vehicles
  • Small Sailboats
  • Motorboats with fewer than 50 horsepower

But you can also add optional umbrella coverage for other property and situations: Additional motorized vehicles; secondary or vacation homes; rental properties; unlicensed recreational vehicles; jet skis and jet sleds, vacant land; and uninsured/underinsured motorists.