Everything You Need to Know About Umbrella Insurance

Everything You Need to Know About Umbrella Insurance

February 22, 2023

Umbrella insurance is designed to protect you from liability claims and lawsuits that exceed the limits of your homeowner or auto policies. In general, it's a good idea for anyone who owns a home or has an automobile to purchase umbrella liability insurance.

What is Umbrella Insurance?

An umbrella policy is a type of insurance that provides additional liability coverage to your existing insurance policies. It’s called an umbrella because it can help protect you from greater financial exposure in the event of a lawsuit or other legal action brought against you.

The idea behind this type of policy is that your other forms of insurance may not provide sufficient coverage for lawsuits involving large sums of money. As such, an umbrella policy can be used to offset some or all of these potential costs by providing more coverage than what’s available elsewhere.

An important thing to note about umbrellas is that they aren't designed to replace traditional types of personal lines coverage like auto insurance (COI), homeowners insurance (HOI) and renters/condo owners' policies (HOIC). Rather than replace any one particular type of personal line policy, they work best when used alongside other kinds, generally filling gaps in liability protection where necessary.

How it Works

Umbrella insurance is an additional layer of liability coverage that provides added protection for you, your family, and your assets. If a lawsuit is filed against you for bodily injury or property damage, it will reimburse you for the costs associated with defending yourself in court.

For example, say your home insurance policy has liability limits of $300,000, but your neighbor sues you for $500,000 in medical expenses and lost income after tripping over your child’s skateboard, which was left outside. If you have an umbrella policy with $1 million in limits, it will cover the remaining $200,000 up to the limit of the umbrella policy.


In addition to a homeowners or auto insurance policy serving as the foundation of an umbrella policy purchase, other assets such as recreational vehicles and boats may also be covered by an umbrella policy.

In most cases, the amount of coverage purchased for each asset falls within a few thousand dollars. For example, your home might be insured for $300,000, but if you wanted to add additional protection against damage claims on it (or other properties), then your umbrella policy could kick in as well.

Considerations When Choosing an Umbrella Insurance Policy

There are a lot of factors to consider when choosing an umbrella insurance policy. Here are some things you should think about:

• What does the policy cover? Does it include liability for damage to property, or just bodily injury? What about medical expenses? Is there a limit on how much money you can receive?

• Who's covered by this policy? Are you covered as an individual or as part of a group (like your family, or your business)?

• How much does it cost? If you're going to be paying premiums every month, you want to make sure that it's worth it—that you're getting your money's worth!

Interested in Purchasing Umbrella Insurance?

If you’re looking to add extra coverage using an umbrella policy, Fiorentino Insurance Group is here to help. Reach out today for more information on how these policies may help protect you, your assets, and your family.