Insurance Basics - Umbrella

March 31, 2022

When You Need an Umbrella

When do you need an umbrella? When it rains? Yep. When it's sunny? Sure, if you need some shade. What about after a huge accident that uses all of your liability coverage on your policy?

An Umbrella policy offers extra liability protection that sits on your auto and home policy in the event of a catastrophe. But how often do you actually need it? What situations would lead to you using this policy? 

Who Needs an Umbrella Liability Policy?

You do! Contrary to popular belief, umbrella liability policies are not just for the wealthy. A $1 million umbrella policy typically costs less than $300 annually. At Clovis Insurance Agency, we recommend that everyone consider carrying an umbrella policy, especially if you engage in a high-risk activity or hobby that increases your odds of getting sued. Look at these possibilities:

  • Auto injury  - If you hurt someone in an auto accident, you could be responsible for their medical bills. Severe injuries are costly and can easily use more than your auto liability. 
  • Home injury - If a guest has an accident at your home, you might have to pay their medical costs. Owning a swimming pool or even entertaining frequently are exposures often overlooked.
  • Lawsuit On Top of Injury  - If an injured party thinks you were negligent, they may be able to sue you for the cost of their medical care.
  • General Legal Costs - If someone sues you due to a covered loss (like a car wreck), you can be exposed if costs go beyond your regular liability.
  • The car you drive - That's right, even if you are perceived to money, it can increase your likelihood of lawsuit.

How Much Coverage Do You Need?

You’ll want to consider not only your total personal assets but also your potential personal risks. For example, does your profession or the location of your home make you an easy target for a big settlement? Determine your personal risks to evaluate the amount of additional liability coverage that makes the most sense for you. We have prepared an umbrella calculator that lives in our forms library

Coverages start at $1 million, and go as high as $5 million. When considering the value of the umbrella policy, discuss your personal needs with your representative. If you want more information, feel free to browse our website, or use the following link to get additional information on Personal Umbrella Liability Insurance.