Skip to content

Rockland Insurance Blog

All You Ever Wanted to Know About Insurance

What is Umbrella Insurance?

8 Reasons you should purchase an Umbrella Insurance Policy

Being properly insured is always important but carrying the right amount of liability coverage is especially critical. Liability claims can quickly spiral out of control and put your home and other assets at risk if you are not completely protected.

Liability risks range from someone falling in your home to a child being injured on your trampoline. The liability doesn’t end at your home, if you have a teen driver in the house or a pet running around you could end up on the wrong end of an expensive lawsuit.

Your homeowners and auto insurance will absolutely step up in these situations but only up to your coverage levels. If an incident is serious, this money can quickly be eaten up which is why an umbrella policy is an important coverage to consider.


What is umbrella insurance?

Despite what the name suggests, an umbrella policy does not provide some type of catch-all protection that magically covers everything that slips between the cracks of your other insurance coverage's.

 However, an umbrella policy can be a financial lifesaver if you are faced with specific types of issues.  A personal umbrella policy provides two different types of coverage, liability and defense costs if you are sued. Umbrella policies often cover items that your primary insurance may exclude as well as extend your policy limits for items such as liability coverage.

 An umbrella policy will step up if you are responsible for bodily injury, property damage or personal injury. If you are found at fault or your negligence causes a personal injury or property damage, an umbrella policy will help pay for any medical bills, repair bills or even the cost of a lawsuit.

 As an example, if a person trips and falls at your home and is severely injured your homeowners insurance should cover those medical bills up to your policy limits. If the medical costs exceed your policy limits, an umbrella policy will cover the balance, up to its policy limits.

 Umbrella policies can provide additional liability coverage for not only homeowners but also auto, boat and even renters insurance. Umbrella policies are usually sold in $1 million increments and are pretty affordable.

 It should be noted that an umbrella policy only provides liability coverage. It does not provide property damage coverage for your own property. If your home, auto, boat or other property is damaged, an umbrella policy doesn’t provide any protection.


Why You Should Consider an Umbrella?

There are numerous reasons to consider putting an umbrella policy in place, but these eight common claims make it clear how useful an umbrella can be:


Pet Bite: This type of claim is actually pretty common. Regardless of whether your dog bites someone in your home or while out on a walk you are protected by an umbrella policy. Dogs can bite people or other animals and costs for medical bills, lost wages and even pain and suffering can quickly add up. If you are sued, you will have to cover both the legal cost and any settlements if you lose the lawsuit.  Please also consider Pet Insurance in addition to the Umbrella Policy.

 An umbrella policy will help cover both medical costs as well as expenses related to lawsuits and settlements up to your policy limits.


Teen Driver in the House: if you have a teen driver living in the house you should absolutely consider an umbrella policy. While auto insurance policies offer liability coverage it may not be enough if your teen driver is involved in a serious accident.

 Teen drivers are some of the most dangerous drivers out on the road and have frequent accidents. In fact, according to government statistics, 16-year-olds have higher crash rates than drivers of any other age and 56% of teens said they talk on the phone while driving. If your teen is at fault in a serious accident medical bills can quickly pile up and a lawsuit is likely.

 In addition, teens are very expensive to insure which makes an umbrella policy an affordable way to up your liability coverage.


House Party Gone Wrong: if you like to entertain, or you have a teen in the house that likes to have parties when you're not around, you should definitely have an umbrella policy. If a person slips and falls in your house or drinks too much, gets behind the wheel of a car and is in an accident you can be on the hook for both medical costs and lawsuits.

If you over-serve a guest and they later cause an accident you can be held liable. Social host liability laws exist in 43 states. Basically, this means you can be held liable if you over-serve a guest and they cause injury to someone after they leave your home. This type of damage may not be covered by a standard homeowners policy but should be covered by an umbrella policy.


You own a trampoline: Trampolines can be pretty dangerous, especially if more than one person is jumping at a time. In fact, the American Academy of Pediatrics recommends that parents not to let their kids use a trampoline and according to industry statistics, three-quarters of injuries occur when multiple people are jumping at the same time.

 Insurers don’t like trampolines, and often raise your rates if you have one on your property. This makes an umbrella policy a great idea if you have a trampoline. While your homeowners insurance would cover medical costs if someone is injured on your trampoline, if the injury is serious, those costs could easily exceed your coverage limits which is where an umbrella policy would take over.


You Have a Swimming Pool: Just like a trampoline, swimming pools are an additional danger and can lead to severe, even life-threatening injuries. While anybody can be injured in your home due to a fall or slip, a swimming pool can result in a life-changing injury such as a broken neck or even death due to drowning. Severe swimming pool injuries often come with dramatic medical costs and those costs can quickly exceed a standard homeowners insurance policy.

 If you have a swimming pool on your property, we highly recommend you carry an umbrella policy in case someone is severely injured in your pool.


You Don’t Think Before You Speak: This is especially true in the age of social media. If you make comments verbally or online that cause harm to another person you can be sued for personal injury. Libel and slander lawsuits can result in a hefty judgment if you damaged another person’s reputation or business through your written or spoken comments. Your liability extends to your children as well, an inappropriate photo of a classmate being posted can result in a lawsuit, and you as the parent will be liable.

 Most homeowner insurance policies will cover libel and slander lawsuits up to your liability limits, but a significant award or settlement can quickly exceed your policy limits which is where an umbrella policy steps in to cover the balance. 


Your Commute is Long: The longer you drive on a daily basis the greater your risk of an accident. This is particularly true if you drive in dense traffic. According to the National Safety Council, 40,000 people died in car crashes in 2018 and another 4.5 million were seriously injured.

 If you are at fault in a serious accident you may end up being sued for not only immediate medical expenses but future medical expenses, lost wages and pain and suffering. All of this can add up to a staggering amount of money and in most cases, your car insurance liability coverage will not cover the full amount. A $1 million umbrella policy can make sure you have enough insurance to cover this type of costs.


You own a second home: If you own more than one home, your liability exposure goes up dramatically, especially if your second home is unoccupied for much of the year and has tempting amenities like a pool, hot tub or trampoline. Uninvited guest that jump a fence and take a dip in your pool could still end up hurt and unfortunately, in many cases, that liability can still fall to you.

 If you rent out your second home or let friends and family use it, this is an additional layer of liability risk. Your standard homeowners policy may exclude damage or liability issues if the home is being rented at the time which makes an umbrella policy a necessity.  We also suggest purchasing an Umbrella if you have a short term vacation rental property or Landlord owned property.  


As you can see, an umbrella can be a financial lifesaver in numerous situations but the best news about umbrella policies is that they are extremely affordable. Umbrellas are sold in $1 million increments and typically cost about $150 a year.

We recommend obtaining an Umbrella Liability quote here or calling our office at (281) 242-0020.