Personal umbrella policy

What is it, why might you need it and what does it cover?

What is it?

A personal umbrella policy, also called umbrella liability insurance, can provide liability coverage over and above what’s provided by your auto or homeowner policy. The umbrella policy is intended to provide an added layer of liability coverage to protect you and your family against potentially devastating financial loss.

Who needs it?

Many assume only “wealthy” people need a personal umbrella policy because they have more assets at risk, but consider this scenario:

You accidentally run a red light and hit another vehicle causing significant damage to the vehicle and injuring the driver and her three passengers. The cost to replace the vehicle is $60,000, and the medical bills total $250,000. The driver, a dentist, is unable to work for months because of her broken hand and sues you for $100,000 in lost wages. On top of all of that, you have $10,000 in legal bills associated with the lawsuit. You’re now on the hook for $420,000 – what if this exceeds the limits of your auto policy?

It’s clear the need for extra protection isn’t limited to the wealthy. In today’s society where medical expenses are high, vehicles cost much more than they used to and lawsuits are frequent, everyone is vulnerable. If it is determined that you are responsible for covering others’ medical bills, property damage and even possible lost wages, you could be facing large financial obligations. And anything not covered by your underlying insurance policies comes out of your pocket – putting your family’s assets at risk: your home, your savings – even your future earnings. A personal umbrella policy can offer an extra layer of liability protection.

What does it cover?

A Personal Liability policy may provide an excess layer of coverage for the following:

  • Liability: Property damage or injury to others as result of a covered loss.
  • Personal Injury: Protection against personal claims, such as defamation of character, libel, or slander that are not covered by your other policies.
  • Legal Defense Costs: Legal expenses associated with lawsuits.
  • Worldwide Coverage: for incidents that happen abroad.

Because a personal liability policy is an extension of your auto or home liability coverage, most carriers only offer the policy if both your home and auto are insured by them.

To learn more, or to see if a personal umbrella policy is right for you, contact your Horace Mann representative.



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