How an Umbrella Insurance Policy Works

Umbrella Insurance 1

Chances are slim that you will lose a lawsuit for a sum greater than what your existing insurance will pay. But if you ever did find yourself in that situation, you could lose all your savings and other assets. A good umbrella policy can prevent that nightmare from happening.

Umbrella insurance is a type of personal liability insurance that can cover claims in excess of the limits of your regular insurance policy. Below, we’ll take a closer look at this extra liability coverage: how an umbrella policy works, who needs it, how much it costs and what it won’t cover.


  • Umbrella insurance is a type of personal liability insurance that covers claims in excess of regular homeowners, auto, or watercraft policy coverage.
  • Umbrella insurance covers not just the policyholder, but also other members of their family or household.
  • Umbrella insurance covers injury to others or damage to their possessions.
  • It doesn’t protect the policyholder’s property or liability due to injury or damage caused on purpose.
  • Umbrella insurance is quite cheap compared to other types of insurances
  • What Is Umbrella Insurance?
  • Umbrella insurance is a type of personal liability insurance that can be indispensable when you find yourself liable for a claim larger than your homeowner’s insurance or auto insurance will cover. If you own a boat, umbrella insurance will also pick up where your watercraft’s liability insurance leaves off.
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