An umbrella policy is a type of liability insurance that provides additional coverage beyond the limits of your existing insurance policies, such as homeowners, auto, or watercraft insurance. It acts as an extra layer of protection to cover costs if you are sued for damages or injuries that exceed your primary policy limits

Key Features of an Umbrella Policy:

• Excess Liability Coverage: It kicks in after your underlying policies (home, auto, etc.) have paid their maximum limits, covering the remaining amount up to the umbrella policy’s limit

• Broader Protection: Umbrella policies often cover claims excluded by other policies, such as libel, slander, false arrest, defamation, and invasion of privacy

• Coverage Examples: Injuries to others, property damage, certain lawsuits, personal liability situations, and legal defense costs

• Typical Limits: Coverage usually starts around $1 million and can be higher depending on the policy

When Does It Pay?

• When damages exceed your primary insurance limits (e.g., a serious car accident causing injuries and property damage beyond your auto insurance coverage).
• For claims not covered by basic policies, such as defamation or false imprisonment

Who Needs It?

• Individuals with significant assets to protect.
• Those at higher risk of lawsuits due to activities, property, or possessions.
• Small business owners may also use umbrella policies for additional liability protection

In summary, an umbrella policy is a safeguard that helps protect your financial assets by covering large liability claims that could otherwise exceed your standard insurance coverage limits