Umbrella Car Insurance Coverage: An Expert Guide (2024)
An umbrella insurance policy is a type of personal liability coverage that can protect you and your assets from a lawsuit in the event that you’re ever responsible for damaging someone’s property or injuring a person in the future. The average umbrella insurance cost is $150 to $300 per year for $1 million personal umbrella liability policy. Depending on the company, an umbrella insurance quote will vary in price.
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Jeffrey Manola
Licensed Insurance Agent
Jeffrey Manola is an experienced life insurance agent who founded TopQuoteLifeInsurance.com and NoMedicalExamQuotes.com. His mission when creating these sites was to provide online consumers searching for life insurance with the most affordable term life insurance, permanent life insurance, no medical exam life insurance, and burial insurance. Not only does he strive to provide consumers with t...
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UPDATED: Jul 5, 2023
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Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.
UPDATED: Jul 5, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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What does umbrella insurance cover? Is it worth having an umbrella insurance policy?
An umbrella insurance policy has nothing to do with staying dry in the rain. Instead, it’s a type of personal liability coverage that can protect you and your assets from a lawsuit in the event that you’re ever responsible for damaging someone’s property or injuring a person in the future. Umbrella policies are usually sold as part of homeowner’s insurance, and they’re meant to provide overall liability coverage against various perils that may result in a lawsuit against you.
The average umbrella insurance cost is $150 to $300 per year for a $1 million personal umbrella liability policy. Most major companies offer umbrella insurance, like GEICO and Progressive. You can also get State Farm umbrella insurance as well.
Although umbrella insurance is typically sold as part of a homeowner’s policy, its coverage dovetails with auto insurance. Depending on your situation, carrying an umbrella policy is a smart financial move. For other insureds, it may be an unnecessary expense. Enter your ZIP code above to get a FREE quote today.
How an Umbrella Policy Works
Umbrella insurance is generalized liability coverage. Unlike the liability coverage that you carry on your car, umbrella insurance isn’t limited to a specific location or vehicle. It follows you wherever you go and protects you regardless of what you’re doing: driving another person’s vehicle, skiing in the Alps, holding a party in your home or visiting with friends out of state.
There are a number of perils that may be covered by an umbrella policy, and the specifics of those perils might vary somewhat between insurers. The general rule, however, is that the damage is committed by you or someone in your household, and it’s accidental in nature. This means that an umbrella policy will cover the injuries sustained by your neighbor if your dog bites them, but not if you intentionally start a fistfight with them. Umbrella policies also cover injuries that happen when people interact with your property. For example, a mechanic who’s injured while repairing your vehicle or a visitor who falls and breaks a leg while crossing your property may both be compensated by your liability insurance.
In most cases, umbrella insurance is an additional liability coverage. This means that it comes into effect after other, more specific coverage has been exhausted. For example, if you are involved in an auto accident, your car’s liability policy will pay for the damages and injuries you cause. If the value of the claim climbs past the amount of liability insurance you carry on your vehicle, your umbrella policy can be used to pay the excess. With its high coverage limit, umbrella insurance generally offers good value for the cost.
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Who Needs Umbrella Insurance?
The primary purpose of liability insurance is protection against lawsuits. The people who most need umbrella insurance are those who are attractive targets for lawsuits. This means both people with substantial personal assets and individuals who are at a particularly high risk of causing harm or damage to another party.
If you have few personal assets and are not a particularly valuable target for a suit, you may be better served by purchasing a vehicle liability policy with higher limits rather than opting for an umbrella policy. You can discuss your options with your agent to see what will save you the most money while protecting you from financial upheaval in the wake of an accident.
Umbrella Insurance: The Bottom Line
Umbrella insurance provides coverage beyond the limits of your other insurance policies, or for claims that may not be covered by liability policies. Umbrella insurance generally provides vehicle liability coverage for injuries, damage to property, and certain lawsuits. It also covers your legal fees and the other party’s medical bills and lost income if they’re injured.
Umbrella insurance doesn’t cover your own injuries or property damage you’ll need other types of coverage for that (such as health insurance or collision coverage on your auto insurance).
Before you start asking umbrella insurance carriers for quotes or comparing them, it’s important that your needs are clear.
Case Studies: Exploring the Benefits of Umbrella Insurance
Case Study 1: John’s Property Damage
John, a homeowner, accidentally caused significant damage to his neighbor’s property while performing renovations. The repair costs exceeded the liability coverage provided by his homeowner’s insurance policy. However, John had an umbrella insurance policy, which covered the additional expenses, saving him from a financial burden.
Case Study 2: Sarah’s Dog Bite Incident
Sarah’s dog bit a visitor on her property, causing severe injuries. The injured person filed a lawsuit against Sarah, seeking compensation for medical bills and lost wages. Sarah’s homeowner’s insurance policy had a limited liability coverage, but her umbrella insurance policy provided the additional funds required to settle the lawsuit.
Case Study 3: Mark’s Auto Accident
Mark was involved in a serious auto accident that resulted in multiple injuries and extensive property damage. The liability coverage of his auto insurance policy was not sufficient to cover all the expenses. However, Mark had an umbrella insurance policy, which kicked in after his auto insurance limits were exhausted, covering the remaining costs.
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Frequently Asked Questions
What is umbrella car insurance coverage?
Umbrella car insurance coverage is a type of liability insurance that provides additional protection beyond the limits of your primary auto insurance policy. It offers an extra layer of coverage to help protect your assets in case you are involved in a severe accident and held liable for damages that exceed the limits of your primary policy.
What does umbrella car insurance cover? arrest.
Umbrella car insurance coverage typically provides liability protection for bodily injury, property damage, and personal injury claims that exceed the limits of your primary auto insurance policy. It may also offer coverage for certain risks not covered by your primary policy, such as libel, slander, or false arrest.
How does umbrella car insurance work?
When you have an umbrella car insurance policy, it kicks in when the liability limits of your primary auto insurance policy are exhausted. If you are involved in an accident and held liable for damages that exceed your primary policy’s limits, the umbrella policy will cover the remaining costs, up to the limit you have selected.
Do I need umbrella car insurance coverage?
Whether or not you need umbrella car insurance coverage depends on your individual circumstances. It can be beneficial for those who want additional liability protection beyond the limits of their primary auto insurance policy. If you have significant assets, own a business, have a high net worth, or are at risk of facing lawsuits, an umbrella policy can provide valuable peace of mind and help protect your assets.
How much umbrella car insurance coverage should I have?
The amount of umbrella car insurance coverage you should have depends on factors such as your assets, income, and potential liability risks. It’s generally recommended to have enough coverage to protect your assets and future earnings. Most insurance companies offer umbrella policies with coverage limits ranging from $1 million to $5 million or more.
Can I get umbrella car insurance without having other policies with the same insurance company?
While some insurance companies may require you to have certain underlying policies, such as homeowners or auto insurance, with them before purchasing an umbrella policy, there are insurers that allow you to buy standalone umbrella coverage. It’s best to check with different insurance providers to see what options are available.
Is umbrella car insurance expensive?
The cost of umbrella car insurance can vary depending on several factors, including your location, driving record, coverage limits, and insurance company. However, umbrella policies are generally considered to be relatively affordable, considering the additional protection they offer. Obtaining quotes from multiple insurance companies can help you find the best rates and coverage options.
How can I purchase umbrella car insurance coverage?
To purchase umbrella car insurance coverage, you typically need to contact an insurance agent or broker who specializes in umbrella policies. They will guide you through the process, assess your insurance needs, and help you select an appropriate coverage limit. Comparing quotes from multiple insurers is recommended to find the best coverage at a competitive price.
Are you looking for free insurance quotes?
Your one-stop online insurance guide. Get free quotes now!
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Jeffrey Manola
Licensed Insurance Agent
Jeffrey Manola is an experienced life insurance agent who founded TopQuoteLifeInsurance.com and NoMedicalExamQuotes.com. His mission when creating these sites was to provide online consumers searching for life insurance with the most affordable term life insurance, permanent life insurance, no medical exam life insurance, and burial insurance. Not only does he strive to provide consumers with t...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.