Do I Need Umbrella Insurance?

August 21, 2020


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In today’s post, we’re answering frequently asked Umbrella Insurance questions. Don’t see the answer to your question below? Contact us, and we’ll make sure you get all the information you need.

Umbrella Insurance is a type of coverage designed to pick up where your regular liability coverage leaves off. You can purchase Umbrella Insurance for yourself personally, or for your home. It’s a great option if you’re looking to protect your assets and wages — especially in the event that you’re sued for something and found to be at fault.

In today’s post, we’re answering frequently asked Umbrella Insurance questions. Don’t see the answer to your question below? Contact us, and we’ll make sure you get all the information you need.

Personal Umbrella Insurance

Personal Umbrella Insurance is a type of coverage that extends your liability insurance. In other words, it’s extra liability coverage, which you can add-on to any liability insurance you already have.

Typical liability insurance policies are limited to things like car, watercraft, or home liability, but Umbrella Insurance covers far more. It can help you cover any expenses you’d be facing if you were sued for damages or injury, and found to be at fault.

What does Umbrella Insurance cover?

Beyond the standard liability coverage you have in place, your Personal Umbrella Insurance covers:

  • Injury to other people; and
  • Damage to other people’s possessions

What doesn’t it cover?

As the policyholder, Umbrella Insurance will never cover your own costs, and it does not protect your property (you’ll need home insurance for that). And, it won’t cover anything that isn’t included on your coverage, like criminal activity or exclusions listed in a policy.

Do I need Umbrella Insurance?

An Umbrella Insurance policy can be of value in the event that you’re sued. If you choose to purchase it, you’ll be protected if you’re sued because of something that happens in your home, in your car, or because of something you did. So, it really depends on your needs!

(A note that if you live in MB, Umbrella Insurance doesn’t apply to things that happen in your car!)

Personal Umbrella Liability Insurance

Personally Umbrella Liability Insurance is additional personal liability protection. Even if your existing policy offers a substantial amount of coverage, it will always have its limits. And because it’s becoming more and more common for courts to award damages that far exceed those limits, some people choose to add this on as extra coverage.

Do I need liability insurance if I have Umbrella Liability Insurance?

Yes! Your Umbrella Liability Insurance policy is extra coverage that you can only access if you already have liability insurance in place.

You can only use your Umbrella Liability Insurance when your primary liability policy limits are exhausted, or if they fall short of the damages you’re being sued for.

Personal Umbrella Liability Insurance

People often get confused between Umbrella Insurance Coverage for Homeowners and Blanket Insurance Coverage for Homeowners, so let’s start by clearing this up!

Blanket Insurance Coverage for Homeowners pays you. So if, as the insured policyholder, something unforeseen or unfortunate happens on your property, you’re covered and paid out.

Umbrella Insurance Coverage for Homeowners pays a third party. In the event that you, the policyholder, are sued and found to be at fault, it helps you pay others for things that aren’t covered by your primary liability policy, like:

  • Damages or Injury Costs
  • Liability & Defense Costs
  • Liability & Defense Expenses

Does Umbrella Insurance cover property damage?

Yes, Umbrella Insurance covers property — but only for third party damage. It does not cover your own property, as the policyholder.

So, should I buy Umbrella Insurance coverage?

It really depends on your needs, but like with all insurance, if you find yourself in a situation where you have to use it, you’ll always be glad you have it!

If you’re not sure whether you have enough assets to really need this coverage, it’s worth noting that you don’t have to be wealthy to benefit. Even if you don’t have any assets, being held liable can lead to “wage garnishment” which means that you could be legally required to give a portion of your income to your creditor!

But, before you buy, remember that Umbrella Policies are meant to serve as back-up, picking up where your auto insurance and homeowners insurance policies leave off, so make sure you have these in place. And, because they’re designed to be met by your other policies first, know that Umbrella Policy deductibles are always high.

Interested in an Umbrella Insurance policy? We can help.

Reach out to us and request a quote. We’ll take you through your options from there!