Why Every Home Should Consider Umbrella Coverage
The $1M Policy Most Households Overlook
Lawsuits move faster than savings grow. In an era where a single accident can bankrupt even a well-off family, a personal umbrella policy (PUP) isn’t a luxury, it’s a low-cost shield against high-stakes risks.
Dog bite? Teen driver? Slip-and-fall at your barbecue? These aren’t “wealthy people's problems.” They’re “anyone-with-assets-to-lose problems.” And for $200–$380/year, you can buy $1–5 million in extra protection on top of your home and auto policies.
What Is Umbrella Insurance?
A personal umbrella policy sits above your existing liability coverage, usually home, auto, boat, or renters.
When your primary policy’s liability limits are maxed out, your umbrella steps in to pay the rest, plus, in many cases, legal defense costs.
Bonus: Many umbrellas include personal injury coverage (think libel, slander, false arrest) and cover you and all resident household members, often worldwide.
What It Usually Covers
Covered (Often)
Bodily injury to others
Property damage to others
Personal injury (libel/slander)
Legal defense beyond underlying policy
Worldwide incidents (varies)
Not Covered (Usually)
Your own injuries/property damage
Business/professional liability
Policy forms vary. Always check your carrier’s wording.
Intentional/criminal acts
Punitive damages (often)
Contractual liability
Common Scenarios Where Umbrella Shines
Teen driver crash: Auto pays $300k, injuries cost $1.2M → umbrella covers the extra $900k.
Dog bite: Medical + lawsuit = $650k; homeowners capped at $300k → umbrella covers $350k.
Slip-and-fall at home: Broken hip + lost wages claim = $1M; home pays $300k → umbrella pays $700k.
Social media lawsuit: A viral post leads to a $500k defamation settlement; umbrella kicks in after your base policy.
Rental property injury: Balcony collapse leads to a $2M judgment; landlord policy pays $500k, umbrella covers $1.5M.
Do You Need It? Quick Self-Audit
Score yourself: 0–2 points each.
Teen drivers or multiple vehicles: 2
Pool, trampoline, or boat: 2
Dog: 2
Savings/home equity over $300k: 2
Active on social media: 1
Rental property or frequent hosting: 2
0–3 points: Consider $1M
4–7 points: Consider $2–3M
8–12 points: $5M+ is worth a look.
How Much to Buy
Rule of thumb: At least your net worth + projected future income.
Typical limits: $1–5M (some carriers go higher).
Pro tip: Ask about Excess Uninsured/Underinsured Motorist (UM/UIM) coverage, protects you if an at-fault driver’s limits are too low.
Underlying Requirements
Carriers usually require:
Auto: 250/500/100 or 300/300/100
Home: $300k liability
Why? Umbrellas are designed for severity, not everyday fender benders.
What It Costs in 2025
First $1M: $200–$380/year
Each extra $1M: $75–$150/year
Rates are creeping up due to larger jury awards and higher medical costs, but still a bargain compared to losing your assets.
Myth vs. Fact
Myth: Umbrella is for rich people.
Fact: It’s for anyone with something to lose.
Myth: My home/auto is enough.
Fact: Jury awards can easily exceed standard limits.
Myth: It won’t cover social media.
Fact: Many umbrellas cover personal injury like libel, check your policy.
How to Get Covered
Raise your home/auto liability to carrier minimums.
Choose your limit ($1–5M+).
Ask about Excess UM/UIM.
Disclose drivers, pets, rentals, and toys truthfully.
Bundle with the same carrier for better pricing.
FAQs
Is it tax-deductible? Usually not, unless for a business.
Does it cover college kids away from home? Often yes, if they’re still household members.
Does it follow me overseas? Many do, check territorial limits.
Can it cover short-term rentals? Possibly, needs special underwriting.
Umbrella vs. excess liability? Umbrella can cover more types of claims; excess is narrower.
Ask your agent about Excess UM/UIM – Not standard, but can be game-changing after a serious crash.
Final word: A personal umbrella policy is the cheapest way to buy millions in peace of mind. Two minutes with OnePoint can tell you if $1–5M in extra coverage could cost less than your streaming bundle.
Call us today. Sleep better tonight.
