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Why do I need a personal umbrella policy?

With the rising cost of litigation and increasing exposures, you should definitely consider an extra layer of coverage.

There are many reasons to buy an umbrella insurance policy. However, first of all, you really need to understand what an umbrella insurance policy does. Think about an umbrella. What does it do? It offers you protection, right?

That is exactly what an umbrella insurance policy does. It offers an extra layer of protection on top of your other insurance policies. Most insurance companies won't sell you an umbrella policy unless you have an underlying policy such as a homeowners or auto policy. However, there are some exceptions to this rule where you can buy a "stand-alone" umbrella insurance policy.

Most umbrella coverage begins at $1 million and adds an extra layer of liability protection to protect you from being sued. It protects you from suits against:

  • Damage to Property: An example of this coverage would be an auto accident where you damage another person's property or cause them bodily injury.
  • Homeowners Liability: This could be damage to another person who is not a member of your household, such as a "slip and fall" incident.
  • Wrongful Prosecution: If a lawsuit you file is dismissed by the judge, the other party could sue you for wrongful prosecution, sometimes called "malicious prosecution." An umbrella policy protects you and pays your legal costs of the court case.
  • Libel or Slander: Libel is writing a falsehood about another person and slander is the speaking falsely against another person. You can be sue for this type of defamation of character,  whether it is libel or slander. The added umbrella coverage can help pay for these court costs. 

The answer to the question of whether you need an umbrella insurance policy will depend on what you are trying to protect. If you own valuable assets and the liability coverage in your homeowners or auto policy is not enough to cover your assets, you may want to check into purchasing an umbrella insurance policy. It can give you the added protection you need.


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