Skip to main content

Thoughts About an Umbrella Policy on a Rainy Day

What would you think of if someone asked you whether or not you had an umbrella policy?  Would you consider it a silly question about your umbrella-carrying habits?  As in whether or not you take an umbrella out the door based on the forecast or the way the sky looks?  Well…that’s probably not what they intended by the question – at least, it’s not what I want you to think about today.  I want you to think about these scenarios…

Your son or daughter hosts a party in your home.  Unbeknownst to you, someone brought alcohol.  One of the kids who had been drinking leaves the party, gets behind the wheel, and causes a severe accident.

Or…It’s your day to drive the neighborhood carpool.  You are involved in a major accident while driving your child and your neighbors’ children to daycare.

In either of those situations, a jury could award the damaged parties millions of dollars…for which you would be responsible!  You could face financial ruin…unless you have a good umbrella policy, that is.

So, what exactly is an umbrella policy?  An umbrella policy (or umbrella insurance) refers to a liability insurance policy that protects the assets and future income of the policyholder above and beyond the standard limits on their primary policies.  These policies are fairly inexpensive – typically having annual premiums under $200/year for $1 million or more in coverage – especially when you look at everything an umbrella policy covers:

  • Protection for covered claims by others for personal injury or property damage caused by you, members of your family/household, or hazards on your property for which you are legally liable.
  • Personal liability coverage for occurrences on or off your property.
  • An additional layer of protection above your primary auto policy against auto-related liabilities.
  • Protection against non-business related personal injury liabilities such as slander, libel, wrongful eviction, or false arrest.
  • Legal defense costs for a covered loss, including lawyer fees and associated court costs.
  • Worldwide coverage – no matter where you go – excepting only situations involving foreign ownership of dwellings and/or automobiles.

Considering all the protection an umbrella policy provides, it would seem an obvious purchase for someone making insurance decisions, correct?  You’d be surprised.  Studies show that less than 15 percent of Americans purchase umbrella policies!  Insurance experts and financial planners believe these policies (or personal liability coverage) should be standard practice to help preserve your financial security – especially in this litigious age of multi-million dollar lawsuits. (

Maybe it’s time to give some serious consideration to the question of whether or not you have an umbrella policy.  After all, we never expect a party hosted at our home to lead to a drunk-driving accident…we never expect to have an accident driving the neighborhood children to daycare…we never expect those beautiful sunny skies to turn overcast…but the unexpected happens all the time!  I’d rather tote my umbrella along and not need it than get caught out in the rain – wouldn’t you?  Talk to your insurance agent today to make sure you’re protected from the unexpected.


Skip to content