Understanding Umbrella Insurance: Essential Coverage for Everyone

A personal umbrella policy adds liability coverage on top of your home and auto policies. It pays after those limits are used up for covered claims such as serious car accidents, injuries at your home and some lawsuits, and often for claims your underlying policies don't cover, such as libel or slander, subject to the policy wording.

Many advisers start with a limit at least equal to your net worth plus future earnings you want to protect. Umbrellas are commonly sold in $1 million increments. The Oak Insurance Group looks at your assets, drivers, property and lifestyle risks before recommending a limit.

Many carriers require your auto policy, and sometimes your home policy, to be with them before they'll write your umbrella. Stand-alone umbrella policies are also available for situations where that doesn't fit. As an independent agency, we can compare both options.

Most umbrella carriers require minimum liability limits on your auto and home policies before the umbrella applies. A common auto requirement is 250/500, but it varies by carrier. We check that your underlying limits match so there's no gap between policies.

A personal umbrella generally covers listed household drivers, including teens, once the auto liability limit is used up. Rental properties can be included when the carrier is told about them and the underlying policies meet its requirements.

For families with significant assets, a larger home, teen drivers, a pool or household staff, an umbrella is usually one of the lowest-cost ways to add a large amount of liability protection. High net worth carriers can offer higher limits and broader terms.