Do I need umbrella insurance?

Key Takeaways

• Umbrella insurance kicks in when your home insurance or car insurance policy isn't enough to cover a large claim or lawsuit.
• Umbrella insurance is a smart way to protect your finances in case the unexpected happens.

Life is unpredictable and so are the costs that can come with it. That's why having the right insurance protection matters. The fact is, while standard policies cover many common risks, they have limitations That's where umbrella insurance comes in. In this guide, we'll break down what umbrella insurance is, when it's typically used, and why it can be the right addition to your financial safety net.

What is umbrella insurance?

Umbrella insurance is extra protection that helps cover big costs when your regular insurance isn't enough. If you're in a serious accident, someone gets hurt at your home, or you're sued and owe more than your auto or home policy covers, umbrella insurance can step in to pay the rest.

Keep in mind that umbrella insurance is not a standalone policy. Umbrella insurance is additional coverage that can be added to your existing homeowners, renters, or auto insurance policy.

Is umbrella insurance worth it?

Umbrella insurance is one of those coverages that you hope you never need, but you'll be glad you have it should the unexpected happen. Since it's designed to help cover additional expenses where your standard insurance may fall short, you could be saving yourself money in the long run.

Umbrella insurance is also surprisingly affordable for the protection it offers. In general, the less risk you have the lower your price, depending on your needs. You can also lower the cost of your umbrella insurance premium by increasing your underlying limits. Considering it can help cover massive legal bills, medical expenses, or damage claims that go beyond your regular insurance, umbrella insurance is a small cost to pay for peace of mind.

5 situations that may be covered by umbrella insurance

1. You're in an accident that involves major injuries. Imagine you're in a serious car accident and several people get hurt. Your regular auto insurance covers up to $250,000, but the total costs (including medical bills and legal claims) reach $750,000. Without umbrella insurance, you'd be responsible for the remaining $500,000. But with an umbrella policy, the extra coverage can step in and pay the difference, protecting your finances from a huge, unexpected expense.
2. Someone gets hurt at your home. Let's say a friend comes over to visit, trips on your front steps, and is seriously hurt. Suddenly, they're dealing with big medical bills and can't work, so they decide to sue you. Your homeowners insurance might cover some of the costs, but what if it doesn't cover everything? An umbrella policy can help pay the extra expenses, so you're not left footing the bill yourself.
3. Your dog bites someone. You're at work and your dog manages to get out of the yard. Unfortunately, it bites someone walking by. The injured person holds you responsible and may sue for medical bills and other damages. If the costs go beyond what your homeowners insurance or renters insurance covers, umbrella insurance can help pick up the rest — protecting you from a big financial hit.
4. Your tenant decides to sue you. You rent out a home and one day a tenant or their guest slips and falls down the steps. If they're seriously hurt and decide to sue, your landlord insurance may not cover everything. That's where umbrella insurance comes in, adding extra protection for these kinds of unexpected claims and giving you peace of mind.
5. You cause an accident while biking. It's a sunny day and you're out riding your bike when you accidentally bump into someone or damage their property. Even though it wasn't intentional, you could still be held responsible. If your regular insurance doesn't cover all the medical bills or repair costs, umbrella insurance can step in, helping protect you from paying out of pocket.

How to get umbrella insurance

At Liberty Mutual, you can secure an affordable and customizable umbrella policy by bundling it with your home, renters, or auto policies. Learn more about umbrella insurance at or call 888-498-2145 to start your quote.