Skip to main content

Why Do I Need An Umbrella Policy?

By April 1, 2017March 17th, 2022Coverage

Every day, we are exposed to risk.  Our daily activities result in lawsuit exposures and unfortunately you no longer have to be a millionaire to be sued like one.

Umbrella liability insurance is appropriately named because it “sits over” your primary insurance, providing you a higher level of coverage above your automobile, homeowner’s, boat, and recreational vehicle policies. Umbrella policies give you higher limits, broader coverage, and worldwide liability coverage.

Your family and your daily activities result in lawsuit exposures every day, and unfortunately the frequency and cost of lawsuits have increased dramatically over the last ten years. If you can answer “yes” to any of the questions below, we strongly recommend you add an umbrella policy to your coverage.

Do you:

  • Serve on a board of directors?
  • Participate in volunteer activities?
  • Have teenaged drivers
  • Drive a carpool?
  • Own rental or vacation property?
  • Have jet-skis, a golf cart, or other recreational vehicles?
  • Have a swimming pool in your backyard?
  • Have financial responsibility for your children?
  • Own a small business in your home and see clients on occasion?


Think about the value of your assets.  If your home, automobiles, investments, and potential future earnings are worth $400,000 and your automobile liability insurance limit is only $250,000, then you are left with $150,000 of uninsured assets.  You can also be sued for more that your assets as seen in the examples below.

Consider these real-life examples where lawsuits were filed and judgments awarded.  We can quickly offer you options to add an umbrella policy to your account and give you peace of mind.

Incident:  The insured was driving on a two-lane road when he struck a pedestrian walking home from work. The pedestrian suffered serious head trauma. The insured was not speeding, there was no alcohol involved and cell phone records show that no phone was in use at the time of this accident.

  • Outcome: The company that wrote the personal umbrella policy paid the $2,000,000 policy limit after the insured’s underlying auto limit of $500,000 was exhausted.


Incident: The insured was operating a ski boat on a lake. As the boat turned, an inner tube with a rope tied to it blew out of the boat. The rope caught the leg of the passenger and launched him out of the boat and onto the dock. The passenger sustained substantial injuries and was totally disabled for six weeks, leading to a business income loss.

  • Outcome: The primary insurance company tendered its full policy limit, which was $500,000 short of the total claim amount. The Personal Umbrella Policy covered the remaining amount. Without the personal umbrella policy, the insured would have had to pay the $500,000 out of pocket


Incident: The insured was driving a vehicle when it was struck in the rear at high speed by an uninsured driver who was intoxicated. The insured was airlifted from the accident scene to a hospital. He sustained spinal injuries and other complications as a result of the accident.

  • Outcome: Because the insured’s Personal Umbrella Policy included coverage for Excess Uninsured/Underinsured Motorists with a policy limit of $1,000,000, the insured was paid the full $1,000,000 for an accident that was not  his fault.