Do I Need Umbrella Insurance?

If you own a home, car, or boat, you’re likely to have primary insurance policies that provide liability coverage for each of these assets. However, your primary policy limits may not be enough to cover all claimed damages, which can cause unexpected financial hardship. That’s where umbrella insurance comes in.

Umbrella liability insurance is designed to further protect against the costs of:

• Claims made against you for bodily injury to others due to a car accident, boat incident, fall or other covered accidents.
• Claims made against you for covered damage to others’ property.
• Personal liability for claims like libel, slander, defamation of character and invasion of privacy.
• Potential out-of-pocket expenses related to each of these (or other) covered incidents. 

Additionally, with increasing dollar amounts awarded by juries in personal auto liability cases—driven partially by social inflation1—it’s essential to safeguard your income and assets.

Anyone who has assets that they want to protect should consider purchasing umbrella insurance. Here are some examples to think about:

• At-home dangers – Trampolines and swimming pools could potentially lead to serious injuries and liability claims.
• Slip and fall claims – Someone could slip and fall—and suffer an injury—on your property. This can apply to your primary residence or if you’re a landlord of one or more additional properties.  
• Family matters – Imagine your liability if your teenager causes a major car accident.  

These are just a few examples of the risks that might make umbrella insurance right for you. An insurance agent can outline additional potential risks you may face. 

Another important reason to consider purchasing umbrella insurance—peace of mind. In life, mistakes and accidents happen. Someone, including friends or visiting loved ones, could become seriously injured on your property or when you’re driving. 

When something like this occurs, you’ll know that you took extra steps to help cover the damages in the event you’re responsible for the loss.

Umbrella policies range in limits typically starting at $1 million and going up to $10 million. To help determine how much coverage you should consider, start by totaling up the value of your property and financial assets, such as:

• Cars, boats, other vehicles.
• Jewelry, art, antiques, other valuables.
• Home equity or equity in other properties you own.
• Cash, savings accounts, CDs, bonds.
• 401(k), IRA, other retirement accounts.
• Stocks, bonds, other investment accounts.

Keep in mind that the specific assets you could lose as the result of a judgement may vary by state. Once you’ve calculated the total value of your assets, ask your insurance representative for guidance on the amount of umbrella coverage that makes sense for you. 

It’s also a good idea to review your coverage periodically and make adjustments as needed to reflect any changes to your assets over time.

Typically, the cost of umbrella insurance is considered very affordable. Your final umbrella policy cost will depend on variables specific to your situation. Talk to your insurance representative about whether you can save money on your premiums by bundling policies with the same insurance carrier.

If you’re thinking about adding umbrella coverage, consider this: you hope you’ll never have to use it, but if you do, you’ll be grateful it’s there. Umbrella coverage is designed to take effect once the liability limits of your homeowners, auto, or boat policies have been exceeded. It’s an economical way to safeguard your assets now to help avoid the possibility of significant financial hardship later.

Ready to protect yourself today and into the future? Ask your local independent insurance agent or a Travelers representative about umbrella insurance from Travelers.