What is “Umbrella Coverage”?

May 3, 2021

Frequently we are asked to explain umbrella coverage and answer the question – Do I need it?

At Crow Hill Insurance, we recommend that all our clients who have assets to protect should have a personal liability umbrella policy in place for their household. Umbrella liability protection is no longer just for the rich and famous. Whether it is a serious at-fault auto accident, or an incident on your property, you can quickly find yourself responsible for damages that exceed the limits on your auto, homeowners, boat or motorcycle policy. In the blink of an eye, a multimillion-dollar lawsuit could erase the equity in your home, car, property, savings and investments accounts and your future income. Think of it as an umbrella you carry in your hand – the coverage goes everywhere with you and can protect your assets and prevent financial hardship, giving you broader coverage if you are sued and peace of mind knowing you are protected.

Everything you have worked for could be at risk:

  • A pedestrian suddenly steps out in front of your car
  • A motorcycle darts into your lane unexpectedly
  • A guest falls and injuries themselves on your property

You can be held responsible for unforeseen events like these – and the resulting lawsuit could threaten everything you have worked hard to build.
In society where multimillion-dollar lawsuits are no longer rare, it is affordable coverage you cannot be without. In most cases you will receive additional coverage for:

  • Bodily injury and property damage for an accident that exceeds your auto liability limit
  • Bodily injury for an accident on your property in excess of your homeowner’s liability limits
  • Any libel or slander judgments made against you
  • In most cases, the cost of your legal defense and attorney’s fees are included in the coverage

Example: A driver is involved in an at-fault auto accident that resulted in serious injuries to the other driver. The at-fault driver was sued, and the lawsuit resulted in a judgement as follows:

  • Judgement amount: $1,500,000
  • Auto liability limit: $500,000 (maximum payout on the auto policy)
  • Gap in coverage: $1,000,000 (what the at-fault driver still owes)

Because the judgement was greater than the driver’s auto limits, and the driver still owes an additional $ 1 Million on the judgement, his personal assets (i.e., money in the bank, investments, personal property, etc) could all be at risk. An umbrella policy with a limit of $ 1 Million would have helped avoid this gap in coverage.
Call Crow Hill Insurance today for a complimentary quote for this additional level of protection up to $ 5 Million in coverage. It is surprisingly inexpensive and offers you peace of mind.