Maybe you have heard of umbrella insurance, maybe you have not. But if you ever find yourself being sued for a sum larger than what your insurance will cover, you will wish you had umbrella insurance!

What is umbrella insurance?

Jokingly referred to as “your money’s best friend”, umbrella insurance is extra liability coverage. Simply put, this type of insurance protects you from large claims or lawsuits that go over and above your other insurance policies (like homeowners or auto insurance). If you found yourself having to pay for expenses relating to claims that exceeded the coverage provided by existing insurance, umbrella insurance could help cover those costs. Think of umbrella insurance as a safety net to completely protect your personal savings and assets. It often will cover not only you but also your family and other members of your household.

How does it work?

If you find yourself being sued for damages that exceed the liability limits of your auto or homeowners insurance, an umbrella policy would step in to help you pay what you owe. Here’s an example of how umbrella insurance can help:

You are driving on a snowy highway and lose control of your vehicle. You hit two other vehicles, causing approximately $100,000 worth of damage and medical bills. One of the drivers of the vehicles you hit decides to sue you for “emotional trauma” in the amount of $250,000. Your auto insurance policy only covers your for up to $100,000, so you have to come up with the other $250,000. This is where umbrella insurance would kick in. Instead of having to come up with $250,000 out of your own pocket, the umbrella insurance policy you took out for $300,000 would step in and take care of the money needed for the lawsuit. An umbrella policy would also provide coverage for any of your legal costs in the lawsuit.

How much does it cost?

Coverage limits on umbrella policies typically start at $1 million, and in most cases can go as high as $5 million. Basic policies at the lower end of the coverage range can cost between $150 to $300 per year. It is important to note that umbrella insurance is not a replacement for home or auto insurance - it is in addition to it. Your umbrella insurance policy may require that you maintain a certain amount of minimum coverage required on your other insurance policies (like home and auto). If the umbrella insurance provider feels you are not maintaining appropriate levels of insurance on your other policies, they may not extend a policy offer to you.

Do I really need umbrella insurance?

There is certainly a fear factor involved in the decision to buy umbrella insurance. Many insurance companies might suggest it due to the lawsuit-happy world we live in. Anyone can sue you for anything and ruin you financially, and umbrella insurance helps you avoid that type of situation. Even if you think your auto and home insurance coverage is substantial, there are plenty of unforeseen situations that make umbrella insurance more attractive. Consider these scenarios:

  • Your dog gets loose and attacks another dog, causing injury to both the other dog and the person walking it. The dog’s owner and the person who was walking it (who just happens to be a professional dog walker), sue you for emotional trauma and lost wages.

- Your teenager throws a house party where alcohol is consumed. A teen who attended the party gets into an accident and causes damage to someone’s property. The parents of the teen who was consuming alcohol at your kid’s party sues you.

- A hotel sues you for writing a negative review online

Unfortunately, these are scenarios that we may be able to see ourselves in. But it is these types of unforeseen scenarios that umbrella insurance can protect you from!


Zammito Insurance is always available to answer your questions regarding umbrella insurance as well as auto, business, home, and renter's insurance. Give us a call at (781) 762-6732 to find out more.