9 Most Commonly Asked Umbrella Insurance Questions

Umbrella insurance is a supplemental insurance option that works to provide an extra layer of protection on top of your current policy’s coverages. It can bolster your personal liability coverage, auto and home insurance policies, and several other insurance types whose available plan options may not be getting you all the coverage you need.

Essentially, umbrella insurance works to fill the gaps left by other insurance options to ensure you are fully protected from a wide range of potential damages.

Unfortunately, there is some confusion about how umbrella policies work and the kinds of coverage they may or may not be able to provide, so to help clear it up, let’s dive into nine of the most commonly asked questions about umbrella insurance.

What Is Commonly Covered Under an Umbrella Insurance Policy?

Typically, umbrella insurance policies provide additional coverage to protect you against four main sources of potential damage. First, it can help offset medical costs and other fees if someone is injured on your property or as a result of your actions. Second, it can help if you or a member of your household are held responsible for property damage. And finally, it works to step in and provide assistance if you’re faced with certain kinds of lawsuits or other personal liability situations.

What Isn’t Covered Under an Umbrella Insurance Policy?

While umbrella coverage works to fill insurance gaps in several key ways, there are a few damages that it doesn’t provide coverage for. These can include injuries sustained by you or a member of your household, damages to your personal property, criminal or intentional actions that result in damage to another’s property or well-being, and any liability you willingly assume while under contract.

Do I Need Umbrella Insurance?

If you own a home, rent a residence, or have other significant assets including an investment portfolio or retirement savings account, you probably need umbrella insurance.

How Much Umbrella Insurance Do I Need?

Generally, most people are better off purchasing more coverage than they think they’ll need, but the amount of umbrella coverage you need will depend on three key factors including:

• The estimated value of your assets including your home, vehicle, investments, and savings
• The liability limits of your existing coverage options
• Your personal level of risk will be based on your occupation and lifestyle. Note that this factor may be the most difficult to determine, so it is worthwhile to take the time to evaluate your personal risk.

The more assets you have that need protection, the more umbrella insurance you need–especially if the limits of your current insurance options are not sufficient enough to offset any personal risk you may face.

What Information Do I Need to Have When Getting an Umbrella Insurance Quote?

When you’re looking to get an umbrella insurance quote, there will be a few pieces of information you may want to have on hand about yourself and your household. This can include information concerning:

• Vehicles you or your dependents own, including whether you already have liability coverage. Note that the term “vehicles” here includes a range of options including cars, trucks, motorcycles, golf carts, RVs, boats, and much more.
• Traffic violations and convictions you or other drivers in your house may have received in the last five years.
• Other insurance policy types you hold such as homeowners insurance, renters insurance, and personal liability insurance. You will need to include the approximate amount of your liability limits for each policy.
• Other properties you own
• Your occupation
• Any liability claims you may have been part of
• Any civil or criminal charges against your or your household

Do Renters Need Umbrella Insurance?

If you’re living in a rental property, personal umbrella insurance can be helpful for you. Renter’s insurance policies can vary dramatically from each other, and while some come with moderate amounts of personal property and liability insurance, others may not combine the two in a single policy, requiring you to invest in an additional policy type. In this case, umbrella insurance can work to make up for the coverage you’re missing, or even to bolster the coverage you already have.

Can Umbrella Insurance Cover a Lawsuit?

Yes. In fact, one of the biggest benefits of umbrella insurance is that it can help protect you from personal liability damages that may result in a lawsuit. Typically, umbrella insurance can help cover you if you face a suit relating to bodily injuries, property damage, or personal injury. However, some exceptions and limits may apply. For example, umbrella insurance will not protect you if you intentionally cause bodily harm or property damage to another person. Typically, any damages must be accidental to be eligible for this kind of coverage.

Is Slander Covered Under Umbrella Insurance?

Yes, both slander and libel are covered under the majority of umbrella insurance policies. They fall under coverage for personal injury which relates to injuries that may relate to false arrests, detentions, imprisonment, libel, or slander.

It’s important to note that personal injury coverage options may not always be included in your umbrella policy, so you may need to seek an additional endorsement if you want to add this protection to your plan’s coverages. Additionally, there may be certain kinds of slander or libel that may still be unprotected with this policy.

Can My Umbrella Policy Cover Professional Liability?

Whether your umbrella policy covers professional liability depends entirely on the kind of umbrella insurance policy you get. If you have a personal umbrella insurance policy like the kind that has been discussed in this article so far, it is very unlikely that you will be able to claim any professional liability damages. 

However, there is another umbrella insurance policy type known as commercial umbrella insurance that is designed specifically to work with businesses and professionals to make sure they get the appropriate supplemental coverage options they need. Note that some professionals may not be eligible for a commercial umbrella policy if their job is deemed too much of a risk. Job types that may not be able to receive coverage include social media influencers, politicians, or other prominent public figures.