Umbrella Insurance: What’s Covered Under the Umbrella?

Nov 20, 2020 | 0 comments

Umbrella insurance, usually referred to as excess liability insurance, is a form of personal liability insurance that covers claims in excess of regular homeowners, auto, or watercraft policy coverage. An umbrella insurance policy is put in place to help the policyholder pay what they owe. To put it in simple terms, if a dollar limit of the original policy has been used the umbrella insurance is used as a fail-safe so the policyholder will not have to dip into their savings fund to pay the outstanding balance. 


Costs and Premiums 

Like many insurance policies, the cost of an umbrella insurance policy will depend on how much coverage you are purchasing, the state where you reside (insurance rates tend to vary by the state), and the risk of insuring you will cost the insurance company covering you. Depending on the number of cars, homes, and family members needing coverage will decide the cost of the policy. The more you have of each, the more expensive the policy will be. Among other types of insurance, umbrella insurance is considered to be quite cheap in comparison with how much the policy actually covers. 

There are always premiums involved with insurance. If you have purchased an auto, home, or watercraft insurance policy through the same carrier it may be a little less expensive to add an umbrella policy through that same carrier. Of course, depending on the policy provider, the policyholder who is wishing to add an umbrella insurance policy will be required to have a base insurance coverage of $150,000 to $250,000 for auto insurance and $250,000 to $300,000 for homeowners insurance.


What Isn’t Covered?

The best part about umbrella insurance policies is that they are focused on providing broad coverages. Any incident that the policy does not specifically exclude is covered. Remember that there is no insurance policy that covers everything! Below is a list of things that may not be covered by an umbrella policy:


  • Damage of your own property. This is a form of liability policy, so it will only cover if you do damage to someone else’s property. 
  • Any damage caused on purpose by you or a covered member of the policy. 
  • A liability incurred in business or professional activities. Business liability insurance is needed to cover these types of incidents.
  • The liability you agreed to assume under a contract you signed.
  • Liability related to war or armed conflicts. 


Wanting to learn more about umbrella insurance and maybe add it to your coverages? Reach out to your local agent for more information.