Excess liability (Umbrella) insurance provides you with an extra layer of liability protection
should you be found liable for causing bodily injury to someone else or damaging their
property. Because the average size of jury awards has increased dramatically in the last few
years, umbrella insurance has become more important, particularly for people who have
numerous assets. The following are a few examples of situations where umbrella insurance
One evening while on the way home, a driver doesn't see a stop sign and broadsides
a city bus. Several of the occupants are injured, resulting in a large lawsuit.
A family dog bites a child. Although the child is not seriously injured physically, there
are some resulting psychological problems. The dog's owner is sued for a
Substantial sum. A man on vacation rents a boat. He runs into a water-skier, severely injuring the
skier's legs. A lawsuit ensues. A homeowner is responsible for a fire that sweeps through his condominium
complex, causing millions of dollars in damage and resulting in several lawsuits.
If any of these happened to you, there's a good chance your liability limits in your Auto or
Home policy would not be adequate. You could be sued for all your possessions, and most
of your future earnings.
Umbrella insurance also helps you with your legal fees. Even if the verdict is in your favor,
your legal fees may be extremely high. If you have a personal umbrella policy, you won't need
to pay thousands of dollars out-of-pocket for legal fees.
Typically, you need to have your auto insurance with higher liability limits of $300,000 or
$500,000. If you have Home or Boat policies, these limits of liability would have to be at the
maximum limits allowed. Umbrella limits usually start at $1,000,000 but higher limits are
The best part of Umbrella insurance may be this – although your protection is substantially
increased, the cost is very reasonable. Your cost will depend on limits selected, number of
autos, residences, boats, etc., and the area of the country where you live. The average cost is
under $250 to $350 a year.