Umbrella insurance can be hard to understand and how do you know if you actually need it? Well, this article will give you an understanding of what it is, how it works, what it does and does not cover, and most importantly- should you look further into getting it.


Umbrella insurance is excess personal liability insurance. The policy will cover you in an event that you file a claim that exceeds your personal liability limits on your homeowners or auto insurance.

Who is an umbrella policy meant for?

Umbrella policies are good for anyone who is at risk of being sued for damages to other’s property or injuries caused to others that occurred in an accident. You should think about purchasing umbrella insurance if you:

  • Own a home
  • Have a car (especially if an inexperienced drive is using it)
  • Own a pool, trampoline, or dog (not all breeds are covered, so check that yours is) or any other hazardous property that increases the chances of someone getting injured
  • Have large savings or other assets
  • Participate in sports where you can easily injure someone else (skiing/snowboarding, golf, and boxing)
How does it work?

First, you need an underlying policy such as homeowners or auto to qualify for an umbrella policy. Then, if you file a claim that exceeds your limits on your homeowners/ auto policy, your umbrella policy will take effect to cover the excess amount to pay things like property damage and medical bills.

What does it cover?

Umbrella insurance covers property damage and medical bills for others, not you or members of your household. If you are sued, it will help with the lawsuit up to the limit on your umbrella policy. (limits start at $1 million and go up from there, usually in million-dollar increments).

A few situations that would generally be covered:

  • You get into a car accident, and the cost of injuries to the other driver exceeds your car insurance liability limit.
  • You have a friend at your house, and they get injured by falling down your stairs. As a result, they sue you for medical bills and pain and suffering for more than your homeowner’s liability limits.
  • Your family travels abroad and you get into an accident and the other person is injured, umbrella insurance could help pay for those injuries to the other party.
What doesn’t it cover?

It does not cover yours or your family’s injuries or property damage. These would fall under your health insurance, collision (your car), or personal property (belongings in your home). A personal umbrella policy will not cover a claim related to your business; you need a business umbrella policy.

We hope this helps you understand umbrella insurance a little more! If you have any questions don’t hesitate to call us- (716)634-5656.

Learn about homeowner’s insurance: Home Insurance Terms Simplified

By: L. DiBartolomeo

August 17, 2020

*This is for advertisement purposes and not guaranteed that you have this coverage on your policy. If you have questions about your policy or are interested in getting a policy please call us: (716)634-5656