The reason you’ve got insurance is to protect you from a rainy day. But, what if that rain turns into a storm, or there’s a gap in your protection? You’ll need a bigger umbrella.

Umbrella coverage serves as “extra” liability coverage above and beyond your auto, homeowners, renters or condo insurance, sheltering you from potentially crippling claims and judgments that cost well beyond your existing coverage limits. This might include the medical expenses of someone injured at your home, a settlement from a car accident you caused, an accident with an under insured motorist or damage you did to someone else’s property.

Umbrella coverage can also bridge gaps left by your existing policies. Consider the following more-common-than-you-think scenarios:

David is driving to pick up groceries and is struck by a car whose young driver was distracted while texting. David luckily only suffers a broken leg and back injuries in addition to serious damage to his car. The distracted driver has the minimum auto insurance required, however, the medical bills and car repair costs are much more. An endorsement for underinsured motorists would help.

Mary works from home and a UPS driver delivering a work-related package falls and breaks his leg on the way up Mary’s steps. A homeowner’s policy may only include incidental coverage and may exclude work-related incidents.

Elderly Leo hires a private caregiver to drive him to the store. Because Leo no longer owns a car, he has no auto insurance. Should the caregiver cause an accident while driving Leo, he could be on the hook for all damages without any coverage.

How much Personal Umbrella Coverage Do I Need?
Umbrella policies are available in million dollar increments, typically from $1 to $5 million, for as little as under a hundred dollars a month. Covering you for liabilities related to personal and bodily injury, property damage and landlord liability, umbrella coverage should protect you no matter where you are in the world by extending your existing policies to cover defense costs, attorney fees and more. 

So, just how much do you need? The rule of thumb is simple: You need to cover your assets. The more you have, the more personal umbrella coverage you need. Having multiple cars, multiple drivers, multiple homes and multiple vehicles will all raise your risk of liability.

Other common situations where personal umbrella coverage will kick in include: liabilities related to slander and defamation of character, or more practically, your dog bites someone, or your teenage driver causes a big accident while texting.  

In today’s litigious society, the typical $250,000 auto insurance or $500,000 homeowner’s policy limits isn’t enough to cover the ever more common million dollar settlements.

What Doesn’t It Cover?
Umbrella coverage does not include damage you do to your personal property, business losses or personal belongings, criminal acts, or the written and oral contracts you engage in. Similarly, business-related liabilities like malpractice or losses related to your work on the board of a for–profit organization will not typically be covered.

For example, if your bathtub overflows and destroys your bathroom, umbrella coverage won’t kick in. But, if a leak damages your downstairs neighbor’s condo, it will back you after your underlying policy limits have been exhausted.

Choose an Umbrella with Wide Reach
When choosing umbrella coverage, consider your current coverages and their limits as well as any potential gaps in coverage. Do this by making a checklist of what your policies cover and what they don’t; what you’d need personal umbrella coverage to do and what limits that requires. Contact your HUB broker to discuss an umbrella policy and how it could help protect you from storms that lie ahead.