You have homeowners insurance. You have auto insurance. Maybe you have insurance on a boat, rental property or another asset.
So why would you need another insurance policy on top of all of that?
Because sometimes a serious accident creates a liability claim that goes far beyond the limits of your primary insurance.
That’s where umbrella insurance comes in.
At Lew Griffin Insurance Group, we often describe an umbrella policy as an extra layer of liability protection. It’s designed to provide additional coverage when a covered liability claim exceeds the applicable limits of an underlying policy, subject to the umbrella policy’s terms, exclusions and requirements.
And you don’t necessarily have to consider yourself “wealthy” to benefit from one.
What Is Umbrella Insurance?
A personal umbrella insurance policy provides additional liability coverage above certain underlying insurance policies, commonly including your auto and homeowners insurance.
Here’s a simplified example.
Suppose you’re responsible for a serious auto accident and a covered liability claim reaches $750,000.
If the applicable liability limit on your auto policy is $500,000, there could potentially be a $250,000 gap.
If you have an umbrella policy that applies to the loss, it may provide additional coverage after the underlying policy’s limit is exhausted.
Without sufficient liability protection, a large judgment could potentially put your personal assets at risk.
That’s the reason umbrella insurance exists.
“But I’m Not a Millionaire. Do I Really Need an Umbrella Policy?”
This is one of the biggest misconceptions about umbrella insurance.
People hear “$1 million umbrella policy” and assume it’s insurance designed exclusively for millionaires.
It isn’t.
Your liability risk isn’t determined solely by how much money is currently sitting in your bank account.
A serious accident can happen to almost anyone.
Think about everyday situations:
You cause a multi-vehicle accident.
Someone is seriously injured on your property.
Your dog injures someone.
Your teenager causes a serious car accident.
Someone is injured around your swimming pool.
A guest falls down your stairs and suffers a significant injury.
The potential liability can become substantial very quickly.
Umbrella insurance isn’t necessarily about being rich. It’s about protecting what you’ve built—and, depending on applicable law and circumstances, potentially future income and assets—from a major liability event.
The Teenage Driver Question
For Central Ohio families, this is one worth discussing.
Your teenager gets their license. Suddenly they’re driving to school, practice, a friend’s house or their first job.
That new independence also introduces additional liability exposure.
Imagine your teen causes an accident involving several vehicles and serious injuries.
Auto insurance provides important liability protection, but every policy has limits. A severe accident can potentially exceed those limits.
An umbrella policy may provide another layer of protection when a covered loss surpasses the applicable underlying liability limit.
So when we talk with parents about insurance for teenage drivers, the conversation shouldn’t necessarily stop at:
“How much did adding my teenager increase my premium?”
Another worthwhile question is:
“Do we have enough liability protection now that we have another driver in the household?”
What Does an Umbrella Insurance Policy Cover?
Coverage varies by insurer and policy, but personal umbrella insurance can provide additional liability protection for certain covered claims involving things such as auto accidents and injuries or property damage for which you’re legally responsible.
Some umbrella policies can also provide coverage for certain personal liability exposures not covered in the same way by an underlying policy.
But an umbrella policy doesn’t cover everything.
It generally isn’t designed to pay for damage to your own home or vehicle, ordinary business losses or every type of intentional act. Specific exclusions and requirements vary considerably by policy.
That’s why it’s important to review the actual coverage rather than assuming that the word umbrella means absolutely everything underneath it is covered.
Who Should Consider Umbrella Insurance?
There isn’t a single formula that determines who needs an umbrella policy.
But it’s especially worth discussing if you have exposures such as:
- A teenage or young driver in your household
- Significant savings, investments or other assets
- A swimming pool or trampoline
- A dog
- Rental property
- A boat or recreational vehicle
- Frequent guests at your home
- Multiple vehicles or drivers
- Higher income or substantial future earning potential
And even if none of those jump out at you, it can still be worthwhile to ask your insurance agent what an umbrella policy would cost.
You may be surprised by the comparison between the additional liability protection available and the premium required to obtain it.
How Much Umbrella Insurance Do I Need?
Personal umbrella policies commonly begin at $1 million in additional liability coverage, with higher limits potentially available.
But choosing an amount shouldn’t simply be a matter of saying, “A million dollars sounds like plenty.”
Your agent can help you look at your overall situation, including your home, vehicles, drivers, assets and potential liability exposures.
It’s also important to understand that insurers typically require certain minimum liability limits on your underlying home and auto policies before an umbrella policy will apply.
In other words, you generally can’t dramatically reduce your auto liability coverage and expect the umbrella policy to simply pick up the difference.
The policies need to work together.
Is Umbrella Insurance Expensive?
This is another reason we think umbrella coverage is worth discussing.
Rather than assuming it’s expensive—or assuming it’s cheap—ask your agent to quote it.
Find out what $1 million or more of additional liability protection would actually cost for your household.
Then you can decide whether the additional protection makes sense for your budget and circumstances.
That’s a much better decision than dismissing umbrella insurance because it sounds like something only wealthy people buy.
An Umbrella Policy Is Really About the “What If?”
Insurance is easy to think about in terms of physical things.
What’s my house worth?
What’s my car worth?
How much would it cost to replace my roof?
Umbrella insurance asks a different question:
What could happen financially if I were held responsible for seriously injuring someone else?
That’s not particularly fun to think about.
But it’s one of the most important risks insurance can help address.
Central Ohio Families: It May Be Worth a Conversation
Whether you’re raising a family in Gahanna, New Albany, Blacklick, Pickerington, Baltimore, Columbus or elsewhere in Central Ohio, your insurance needs can change as your life changes.
You buy a bigger home.
Your teenager starts driving.
You add a pool.
You purchase a rental property.
Your income and assets grow.
But your liability limits may have stayed exactly where they were years ago.
That’s why an insurance review shouldn’t only be about finding a lower premium. It’s also an opportunity to make sure the protection you have still matches the life you’re living today.
Your Insurance Is Only as Good as Your Agent.
At Lew Griffin Insurance Group, we’ll help you look beyond the price of your insurance and understand what your coverage is actually designed to protect.
As an independent insurance agency, we can compare options from multiple insurance companies and help you evaluate whether an umbrella policy belongs in your overall insurance plan.
Because sometimes the most important coverage you have is the coverage you hope you’ll never need.
Wondering if you should have an umbrella insurance policy?
Talk with Lew Griffin Insurance Group and let’s take a look at the protection you already have—and where an additional layer may make sense.
Lew Griffin Insurance Group
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