Umbrella insurance

Umbrella insurance is a personal liability policy that provides coverage above the limits of underlying homeowners, auto, and watercraft policies. Standard umbrella insurance in the US typically starts at $1 million in coverage amounts, with annual premiums averaging $150–$300 as reported by the Insurance Information Institute.

Insurers like GEICO, State Farm, and Allstate offer umbrella policies to both individuals and families seeking broader asset protection. Umbrella insurance covers legal defense costs and settlements if you are sued for bodily injury or property damage, such as dog bites or slip-and-fall accidents on your property.

It does not cover your own injuries, damage to your own property, business activities (unless specifically endorsed), or criminal acts according to insurer policy documents. You may need umbrella insurance if your net worth exceeds your base policy limits or if you face higher liability risks due to teenage drivers or rental properties.

Policyholders must carry minimum liability limits on their auto (commonly $250,000/$500,000) and home (often $300,000) insurance before an umbrella policy activates, per underwriting guidelines. Typical exclusions from umbrella policies include intentional acts, contractual liabilities (such as breach of contract), and professional services–examples found in most major carriers’ sample policies.

Filing a claim under umbrella insurance follows after exhausting all underlying policy limits; only then does umbrella coverage apply as confirmed by claim settlement reports. Umbrella insurance covers libel and slander lawsuits against insured parties when personal injury endorsement is included–a feature available through Travelers and Chubb products.

Umbrella insurance does not generally cover damages resulting from uninsured business pursuits unless endorsed as shown in ISO standard forms used by nationwide insurers, as per the Insurance Information Database.