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Understanding Umbrella Policies

How Does Umbrella Insurance Coverage Work?

Umbrella insurance coverage is a type of additional insurance that provides extra liability coverage beyond existing personal insurance plans (NOTE: a person must hold standard coverage policies to be eligible for umbrella coverage). It kicks in when other personal coverages, like homeowner and auto insurance, have reached their maximum payout limit.

Coverage Provided by Umbrella Insurance Policies

Umbrella coverage shields the policyholder from a wide range of risks above and beyond what’s covered by their existing policies. In this way, umbrella coverage is slightly different from excess liability insurance, which simply extends limits on the coverage you already have. Umbrella insurance policy coverage may include:

  • Medical costs in case of major injury or death
  • High-value property repairs or replacement 
  • Legal fees associated with libel or slander lawsuits
  • Legal fees for liability lawsuits
  • Damages associated with vacation rentals

People covered

Who Does an Umbrella Policy cover?

Every policy is different, but those covered by umbrella insurance may include:

  • The policyholder and their spouse - assuming they’re living in the same household
  • Household residents younger than 21 with the policyholder as official custodian
  • Relatives living in policyholder’s residence

What does it cover?

Umbrella Insurance Coverage Example

Umbrella coverage is typically associated with major claims - the most unexpected kind. For instance, a policyholder at fault in a car accident in which the other driver’s injuries require extensive medical care, plus expensive repairs to the both vehicles, may find their existing policies won’t cover the higher-than-expected costs. Without an umbrella coverage policy in place, the at-fault party will need to pay out of pocket or may face further legal risk (the costs of which can be covered by an umbrella policy).

How much is Umbrella Coverage?

Understanding the Average Cost of Umbrella Insurance

When it comes to the cost of umbrella insurance, it may be more affordable than you think. 

The cost of a personal umbrella policy typically lands in the range of  $150 to $400 per year for a $1 million policy. Of course, the exact cost can vary depending on several factors, so it’s always best to reach out to a professional to learn more.

Factors Affecting Cost

  • Your location: this is particularly true when a policy is paired with an underlying home or auto policy
  • What’s being insured: homes may require more coverage than a car or motorcycle, or may be at greater risk
  • Underlying policies: since umbrella coverage kicks in after underlying policies max out, the more that gets covered by the underlying policy, the less an umbrella policy may cost
  • How much coverage is needed: similar to the above, but in reverse - if you have limited max coverage in underlying policies, but have high-value assets you’d like covered by umbrella policies, it will increase the cost

Why get more coverage?

Benefits of Umbrella Coverage

There are many reasons to add umbrella coverage to your personal insurance policy. Some benefits of having umbrella insurance coverage include:

  • Typically has lower costs than extending existing coverage
  • May cover risks that aren’t covered by standard auto, home, business or other common policies
  • Many umbrella policies provide coverage worldwide
  • Payouts can FAR exceed the costs
Get Umbrella Coverage

What do I need first?

Policies Needed to Get Umbrella Coverage

There are several insurance types that a policyholder should have before getting umbrella coverage extensions:

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Home & Auto Insurance

Protect yourself and your loved ones from risks on the road and at home

Get Home & Auto Coverage

Personal & Business

General Liablity

Protect yourself or your business with general liability insurance coverage to help with damages and medical costs

General Liability Coverage Info
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Renters Insurance

Renters seeking umbrella coverage are required to have a renters insurance policy in place

Get info on Renters Insurance

Choose Ansay & Associates for Your Umbrella Insurance Needs

Choosing Ansay & Associates as your insurance broker means working with a partner that values your peace of mind as much as you do. Don't wait for the flood of claims and costs to reach your door; invest in an umbrella policy today and protect your future. You can't predict the weather, but with Ansay & Associates, you can prepare for it.

Contact our team to get coverage that goes above and beyond your traditional insurance, and keep more of what you earned in the event of a worst-case scenario.

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