Umbrella Insurance Explained (Simply)

Umbrella insurance is extra insurance that provides protection beyond existing limits and coverages of your home and auto policies. Umbrella insurance can provide coverage for injuries, property damage, certain lawsuits, and personal liability situations.

Here's an example -let's say you cause a car accident and the cost of the injuries you cause to others is $600,000. Let's also say that the bodily injury limits on your auto insurance are $300,000. Your auto policy will cover $300,000 of the injuries. But who will cover the remaining $300,000? That would come out of pocket unless you have an umbrella policy -this is where your umbrella policy would kick in and cover the $300,000 your auto policy does not.

A typical umbrella policy starts at $1M in coverage and is usually recommend anyone over the age of 35 (usually they are a homeowner, have multiple drivers, a family, etc) because it provides some additional coverage in the event a serious liability occurs.