10/20/2026
โ๏ธ What Exactly Is an Umbrella Policy?
You may have heard someone say, โI have an umbrella policy.โ
But what does that actually mean?
An umbrella policy provides additional liability protection above the limits of certain underlying insurance policies, such as your auto or homeowners insurance.
Here's a simple example:
You have a serious auto accident and are found responsible for $600,000 in damages.
Your auto policy has a $500,000 liability limit.
Without additional protection, you could potentially be responsible for the amount above your policy limit.
An umbrella policy can provide an additional layer of liability protection, subject to the policy's terms, conditions, exclusions, and limits.
โ๏ธ Umbrella policies aren't just for wealthy people, either.
They can be worth considering for anyone who has assets to protect, significant future income, rental properties, recreational vehicles, or other situations that could create additional liability exposure.
And umbrella coverage isn't limited to personal insurance. Businesses can also purchase excess or umbrella liability coverage to provide additional protection above underlying commercial liability policies.
๐ก Think of it this way:
Your underlying policy is your first layer of protection.
Your umbrella is another layer that can sit above it.
More liability protection doesn't mean you're expecting something to happen. It's about being prepared if something does.
If you're wondering whether an umbrella policy makes sense for your situation, it's worth having a conversation with your insurance agent.
โ Insurance of Mid-Cities Agency
