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What You Need to Know About Umbrella Insurance

We’ve all heard the old adage, “better safe than sorry.” If you believe in being cautious with your finances, Umbrella insurance may be right for you. Here’s what you need to know about Umbrella insurance so you can make a smart, informed decision.

What is Umbrella Insurance?

Umbrella insurance is a type of insurance designed to provide additional financial protection beyond the coverage offered by your personal insurance, i.e. Home or Auto insurance in the event that you unwittingly cause damage to another person or their property. In general, Umbrella insurance comes into play in the event of a lawsuit and is especially helpful when the insurance owner is sued for more than the dollar limit of the original policy.

Umbrella insurance is a form of supplemental insurance, so it cannot be purchased as a standalone policy. In fact, most Umbrella policies require that you meet a certain coverage limit on your other policies before you’re eligible to purchase.

What Does Umbrella Insurance Cover?

Umbrella insurance protects you from financial liability in the event that you unwittingly cause damage to another person or their property. While every policy is different, here are a few examples of situations that might be covered under your personal Umbrella policy:

  • You get in a car accident where you’re at least partially at fault
  • Your dog bites someone
  • Someone is injured in your swimming pool
  • You’re found guilty in a defamation lawsuit

What’s Not Covered by Umbrella Insurance?

Umbrella insurance only provides liability protection—it does not cover everything that a standard policy does. Here are some examples of situations that would not be covered by Umbrella insurance.

  • An injury to yourself
  • Damage to your own personal belongings
  • Business liability
  • Liability due to intentional or criminal behavior
  • Liability incurred through written or oral contracts

How Much Does Umbrella Insurance Cost?

In general, Umbrella insurance tends to be much more affordable than your base Homeowners or Auto coverage. In fact, depending on your policy, you can usually add about $1 million dollars of extra coverage for only $150-$350 per year. Remember, because Umbrella insurance is a supplemental policy, your insurance provider could require a certain dollar amount of coverage on your Homeowners or Auto insurance before you become eligible to purchase Umbrella insurance.

Do I Need Umbrella Insurance?

Many types of people could benefit from having an Umbrella insurance policy in place, and the best way to determine the personal benefit is to discuss a policy with a trusted insurance agent. That said, consumers who have significant financial assets would benefit from the additional layer of protection that an Umbrella policy provides.

How Much Umbrella Insurance Do I Need?

To determine how much Umbrella insurance you need, we recommend speaking directly with your insurance agent. The more they understand about your lifestyle and assets, the better able they’ll be to help you determine how much coverage you need to be sufficiently protected.

Have additional questions about Umbrella insurance? Grange Insurance Association can help! Contact an independent insurance agent to learn more about your coverage options. In the meantime, check out our Insurance Blog, where we cover everything from how to prevent water damage to how to insure an engagement ring.


The content available via Grange.com is for informational purposes only and may not be used for any other purpose. Content provided or expressed on Grange.com, including that of third parties, may not reflect Grange Insurance Association’s (GIA) policies or conform to any agreement you may have with GIA and its subsidiary companies. Please contact a licensed insurance agent to obtain particular advice.

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