Do I Need an Umbrella Policy?

An umbrella policy is one of the most affordable and most misunderstood types of insurance. Here's what it does, who needs it, and why David recommends it to most of his clients.

What Is an Umbrella Policy?

An umbrella policy provides additional liability coverage above and beyond the limits of your home, auto, and other policies. If you're sued for more than your underlying policy covers, your umbrella kicks in to cover the difference, up to $1 million or more.

Who Needs One?

David recommends umbrella coverage for anyone who: owns a home, has teen drivers, owns rental property, has a swimming pool or trampoline, coaches youth sports, has significant savings or investments, or simply wants an extra layer of financial protection. In short, if you have assets worth protecting, you need an umbrella.

What Does It Cover?

Umbrella policies cover a wide range of liability scenarios including: auto accidents where you're at fault and damages exceed your auto policy limits, injuries on your property that exceed your homeowner's liability limit, libel, slander, and defamation claims, legal defense costs, and incidents involving rental properties or recreational vehicles.

What Does It Cost?

Here's the surprising part: umbrella policies are remarkably affordable. A $1 million umbrella policy typically costs between $150 and $350 per year, roughly $15 to $30 per month. That's a significant amount of protection for a relatively small investment.

Real-World Scenarios

Scenario 1: Your teenager causes a car accident with $400,000 in injuries. Your auto policy covers $300,000. Without an umbrella, you're personally liable for the remaining $100,000. With an umbrella, it's covered.

Scenario 2: A guest falls down your stairs and sues for $500,000. Your homeowner's liability covers $300,000. Your umbrella covers the rest.

An umbrella policy is cheap peace of mind. David can add one to your existing coverage in minutes. Call (800) 555-0300 for a free quote.