Umbrella Insurance

Learning about Umbrella Insurance

Umbrella insurance gets its name from the fact that it shields you from paying high out of pocket costs when your primary insurance is depleted. Here are some helpful facts about this type of insurance.

Is it Primary Insurance?

An umbrella policy is not primary insurance. Instead, it is a type of supplemental liability insurance. It becomes active after you have reached your limits on other policies, such as your auto insurance.

Is it Complicated?

It’s pretty easy to understand. If you have $250,000 in liability coverage on your auto policy and you’re sued for $500,000, then your umbrella policy would pay the other $250,000 – at least if you have that much coverage. Umbrella policies can also handle a situation that your other policies exclude, such as libel.

Do I Need this Coverage?

This insurance is mostly for people who have a lot of assets, and are at risk for facing lawsuits.


There are personal and commercial umbrella insurance policies. Personal coverage works with your home and auto policies. But a commercial policy works with your business to cover you against business losses.

The main benefit of umbrella insurance is the extra assistance is provides. It is a backup if your regular insurance falls short of your needs.