What is Personal Umbrella Insurance


What is Personal Umbrella Insurance?

Personal umbrella insurance is extra liability insurance designed to help protect you from claims and lawsuits in excess of your regular homeowners, auto, or watercraft standard policy limits.

It is important to have sufficient coverage to protect your current assets and future earnings from an unforeseen event, such as a tragic accident in which you are held responsible for damages or bodily injuries. Otherwise, you could be liable for more than your current coverage limits.

How does Personal Umbrella Insurance work?

Consider the following scenarios:

Scenario #1:

Your home insurance provides $300,000 of liability coverage. A serious accident happens on your property, and you’re sued for $1.3 million resulting in a judgment against you.

Your insurance pays up to $300,000 for a covered accident, but you hold responsibility for paying the remaining $1 million.

If you had $1 million of coverage under an umbrella insurance policy, you’d be covered with nothing out of your pocket (other than your monthly premium). Instead, without the additional protection from a personal umbrella policy, you’re looking at the possibility of needing to liquidate your assets to pay the remaining $1 million in this example.

Scenario #2:

You are driving home from work and become involved in an auto accident, where you are found to be at-fault. The other driver is seriously injured and has accumulated over $800,000 in medical bills and damages. Prior to the accident, the other driver elected lower liability coverages to save on premium costs. Since you were ticketed to be at-fault for the accident, the other driver can choose to sue you for damages. If you have an umbrella policy with a limit of 1 million, it will easily cover the money awarded to the other driver (and court costs) at no cost to you, other than your monthly premium payments.


What are the Benefits of having Personal Umbrella Insurance?

Now that you’ve had a refresher on what umbrella insurance is and how it works, you may find that having supplemental protection is the right fit for you. Here are some other advantages:

  • Serves as additional coverage – Umbrella insurance will only kick in once you have exhausted coverage from your other liability policies. If you are found to be responsible for $400,000 in damages due to an accident in your home, but your homeowner’s insurance only covers $300,000, your umbrella policy will cover the $100,000 difference. 
  • Provides protection for your assets – Without umbrella insurance, the court could go after your assets or your personal property to cover damages associated with an accident. 
  • Affordable – Personal umbrella coverage is typically low in cost, providing you with the peace of mind you deserve at a price you can afford. Many find that being financially prepared to deal with an unexpected circumstance makes up for the extra cost.
  • Michigan No-Fault Reform – Bodily Injury liability exposures increase greatly-If 51% at fault or greater the at fault party will now be liable to the injured party or parties!

Why the Michigan Auto Reform Means You Might Need More Coverage


With the new changes to Michigan’s auto laws, also known as the Auto Reform, Michigan drivers will now be able to opt out of certain levels of coverages, which can help lower premium costs. While this can save money up front, many insureds do not realize that these new laws can cost them a lot in the long run. By opting out of their current coverages (which provide unlimited benefits in the event of an auto accident), drivers will only receive a certain amount of a payout in the event of an accident. Lower payouts mean more lawsuits to make up the difference in damages. 

For more information, reach out to your account manager!

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