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Personal Umbrella Policy FAQs

Updated: March 2018

You may have heard of a personal umbrella policy, but do you know what it does?

A personal umbrella policy is an optional protection that extends the liability coverage provided by an underlying policy, such as homeowners or car insurance. The extra protection helps you pay expenses — if you're found liable for damages that exceed the limits of your underlying policy.

Here are answers to some frequently asked questions about umbrella policies.

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Q: IS A PERSONAL UMBRELLA POLICY RIGHT FOR ME?

A: Almost anyone may benefit from a personal umbrella policy, regardless of income or assets, because accidents can happen to anyone and high costs can result. Suppose a guest is injured in your swimming pool or while playing with your children on a swing set, you cause a car accident that results in injuries to another person or you're sued for alleged defamation after you post a negative online review. An umbrella policy may help prevent you from paying out-of-pocket for costly medical or legal bills if you're found responsible in situations such as these.

Or suppose, for instance, that you have a backyard swimming pool or a motorcycle. Certain lifestyle factors can come with additional responsibilities — and potential liabilities if you don't have sufficient protection in place. An agent can help you decide if a policy is right for you.

Read more: What is Umbrella Insurance?

Q: WHY WOULD I NEED AN UMBRELLA POLICY?

A: A personal umbrella policy provides additional liability coverage after you've reached the limits of a standard insurance policy, like homeowners or car insurance. For instance, suppose you have $250,000 in bodily injury liability coverage on your car insurance policy. If you are at fault in an accident that injures another person, your auto liability insurance would cover up to $250,000 for that person's injuries. But if the other person's injuries totaled $750,000, you may be responsible for paying the remaining $500,000. An umbrella policy could help cover that cost.

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Q: HOW MUCH UMBRELLA INSURANCE COVERAGE DO YOU NEED?

A: Personal umbrella policies typically offer at least $1 million in liability coverage. They are usually available in increments of $1 million, up to $5 million. Your agent can help you decide how much coverage is right for you.

Q: DOES A PERSONAL UMBRELLA POLICY COVER MY WHOLE FAMILY?

A: A personal umbrella policy may extend to other members of the policyholder's household, such as a spouse or children. Some exclusions may apply, though. Be sure to read your policy or reach out to your agent to learn which members of your household may qualify for umbrella protection.

Read more: Who is Covered by a Personal Umbrella Policy?

Q: CAN RENTERS BENEFIT FROM AN UMBRELLA POLICY?

A: Anyone, regardless of whether they own or rent a home, may face a liability claim. The extra liability protection provided by a personal umbrella policy may help protect renters in the event that they are found legally liable for someone else's loss, such as medical bills or property damages. Not all insurers offer umbrella policies for renters, though. Your agent can explain what liability coverages are available to you.

Read more: I'm a Renter. Do I Need a Personal Umbrella Policy?

You probably don't expect to cause an accident and be found liable for damages. But sometimes the unexpected does occur. A personal umbrella policy can help provide a larger safety net — just in case. Contact a local agent to learn more about these policies and to help you determine what types of insurance coverage are right for you.

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This content is for informational purposes only and may not be applicable to all situations.

Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, Northbrook, IL. © 2018 Allstate Insurance Company, Northbrook, IL.
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