Umbrella Insurance Explained

Why Would You Need an Umbrella Policy?

Most people think they don’t own much so why would they need a million dollar, or more, umbrella policy?

You have worked long and hard to get where you are at financially.  

Even if you don’t have much in the way of assets, you can still have your future earnings garnished for life.

Imagine how that would affect your lifestyle if that happened.

Most people believe it will never happen to them.

But accidents do happen, that’s why they’re called accidents! 

If you were to cause an auto accident involving major property damage and/or extensive injuries to another person, your hard-earned assets could be at risk and your future income.

The cost of the property damage, injuries to other parties, and potential lawsuits could quickly and easily exceed the limits of your auto insurance. 

It’s not just auto accidents you need to worry about.

You need to protect yourself from other types of accidents as well. Imagine this:

You’re having a graduation party and someone slips, falls, and is injured.

Think you won’t be sued?

Think again.

In today’s society, lawsuits are common…and costly.

A lawsuit could destroy your financial security, but an umbrella policy could protect you.

An umbrella policy picks up where your homeowner’s or auto policy leaves off.

So if you have a bad auto accident and the lawsuit settles for $800,000 the umbrella would pay for the difference between what the auto policy limits are and what the settlement is. ($800,00 – $500,000(auto limit) = $300,000 paid out by umbrella policy).

The umbrella will also pay for legal expenses in addition to the limit of the policy being paid out. Legal expenses alone could bankrupt you in a lawsuit.

An umbrella policy usually only costs $200-$300 per year to provide you with $1 million in liability coverage.   Well worth it for some peace of mind.

What are some things that could increase your risk of a lawsuit?

1. Long commute

2. Commuting regularly during rush hour

3. Having a pool on your property

4. Entertaining guests frequently on your property

5. Owning a dog



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Here are some examples of what an umbrella policy may cover.


1. More liability coverage than most insurance policies provide.

2. Personal injury coverage for slander, libel, wrongful eviction or entry, defamation of character, and malicious prosecution claims and more.

3. Protection in — and even outside — the U.S.

4. Vacation rental coverage that offers liability insurance for rentals such as jet skis and boats.

5. Coverage for attorney fees and other defense costs.

6. Juries award damages based on the severity of an accident — not your ability to pay those damages. That means that you could be forced to sell your home and liquidate your assets to cover costs.

7. A personal umbrella insurance policy provides the extra coverage you need to help protect your car, house, boat, motorcycle and more.

8. Coverage for you and your residents insured under the policy.

Depending on the policy the umbrella may provide coverage for events your home and auto policies do not.

For example, if you do not have personal injury coverage on your homeowner’s policy then your umbrella would provide coverage for libel, slander and defamation.

These types of lawsuits are becoming more common in the age of social media.

Another example, you have a party at your house and someone drinks too much, drives home, and causes an accident injuring another person.

You could be held legally liable for that injury. With the right umbrella policy you would be covered for that lawsuit.

You can never 100% insure yourself against every possibility of what could happen to you in life but with an umbrella policy you are much better protected against a wider variety of lawsuits and against the more nasty, expensive lawsuits arising from injuries in auto accidents or on your property.

Umbrella policy coverages vary widely between companies so make sure you discuss with your agent what your risks are and what you want out of your umbrella coverage.

I am here to make sure you get the right policy to protect you and make sure your insurance experience is a happy one.

Sondra Wendt – 623-297-1475

Independent Agent
EZ Insurance Solutions


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