Personal Umbrella Policy

The extra cushion of Umbrella Insurance.

A personal umbrella policy can give you peace of mind.  It is a second layer of liability coverage above your personal policies.  A personal umbrella policy protects both your existing personal assets and future assets, like wages, an inheritance, or even the lottery you hope to win, against the cost of losing a lawsuit over a car accident or an accident on your property.  An umbrella policy picks up after your auto or homeowners insurance policies meet their limits to cover remaining costs and expenses to the winning party, as well as legal fees.

A Personal Umbrella Insurance Policy Covers More than You May Think

  • You, the insured, and any resident relatives (spouse, children, elderly parent)
  • Gaps in your primary policy coverage.  You will need to consult with your agent or carrier about your specific umbrella policy but some examples of added coverage include protection for personal injury liability for wrongful entry, false arrests, invasion of privacy, slander, defamation, and libel.
  • Legal payouts against you when your underlying liability insurance limits are exceeded by a covered lawsuit
  • Legal costs and expenses are covered by the insurance company and are typically covered outside your policy limits.

Underlying Insurance Requirements

Because an umbrella policy is designed to be a form of secondary insurance, it will have underlying insurance requirements.  This means that you’ll have to have a certain amount of auto and homeowners insurance coverage as a condition of being approved for an umbrella policy.  The underlying insurance requirements will vary depending on the company and the state.

Things that Increase Your Risk of Being Sued

If you don’t drive, always take public transportation, live a monastic life, and own no property, you are much less likely to need an umbrella policy.  On the flip side, there are a few lifestyle factors where an umbrella policy will be beneficial.

  • A very long commute to and from work or school
  • Driving during rush hour, when drivers are most likely to get into an accident
  • Your home has a swimming pool or spa
  • You own a dog
  • You frequently have guests in your home

Most personal umbrella policies are very affordable, often as little as a $1 a day or less.  Just because you don’t fall into any higher risk categories of being sued, doesn’t mean you are at no risk.  Think of an umbrella policy as bad luck insurance.  The safest course of action is to be insured.  Remember, that as your financial situation changes, you may need to add more coverage in the future.

Contact a Foundation Insurance Group expert for more information about our Personal Umbrella Policy products.