How Does Umbrella Insurance Work?

Personal umbrella insurance works by expanding your liability coverage in two ways. Most policies increase liability coverage amount to $1 million or more and generally include new covered claims such as libel, defamation, and slander.

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If you’re found liable in a lawsuit, your auto, home, or watercraft policy will only cover damages up to a certain limit. After that, any liability expenses become your responsibility. The suing party could claim assets like your life savings, investments, and even your home to gain their full compensation.

Here is where umbrella coverage comes in. Once you’ve exhausted the underlying policy limits, an umbrella policy will pay for the difference, protecting you from losing everything.

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What Does Umbrella Insurance Cover?

Umbrella insurance protects you from liability if you’re responsible for damage inflicted on others or their property. Coverage can extend to the policyholder’s spouse and any dependents or relatives that live with them.

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What is covered?

• Auto accidents

• Bodily injury

• Personal injury

• Property damage

• Funeral costs

• Legal fees and defense costs

• Medical expenses

• Landlord liability

• Slander

• Libel

• Defamation

• False arrest

• Malicious prosecution

• Shock or mental anguish

• Certain dog breeds

• Incidents that take place abroad

• Accidents involving rental property like watercrafts or scooters

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What isn't covered?

• Bodily injuries to the policyholder

• Damage to the policyholder’s personal property

• Criminal or intentional action

• Claims excluded from the underlying policy, like restricted dog breeds

• Others' property damage or personal injury that your business might be liable for