Umbrella Insurance

Umbrella insurance is an option for people who have auto and home insurance. Umbrella insurance adds an extra layer of protection to existing liability protection. For instance, if you are in a car accident or someone is injured on your property and you are sued for damages. Liability will pay the claim. However, there’s a chance your policy might not be enough to cover the expense. That’s how umbrella insurance helps.


Umbrella policies are also known as excess liability insurance. These policies supplement a primary policy, usually covering a building or vehicle. Just note that this coverage is not the same as supplemental insurance. Supplemental insurance and umbrella insurance serve different purposes, so don’t get them confused. Supplemental insurance is used with health insurance. Umbrella insurance is used with auto or house insurance.

Types of Policies

Personal umbrella policies generally cover events associated with real estate or vehicles. Commercial umbrella policies work the same way, but are for a business. Commercial umbrella policies also have exclusions, such as they might not cover workman’s compensation or pollution claims.

Most people who have umbrella insurance have a lot to lose. They are high risk people who are likely to be sued if something goes wrong. It depends on your situation. For example, if you run a bookstore, then you probably don’t need as much coverage as the operator of a skydiving school. The best option is to speak with an insurance agent to determine your level of risk.


The benefit of umbrella insurance is that it protects your assets. It keeps you from having to pay high out of pocket costs should your insurance be exhausted.