What does the term "Umbrella Insurance" mean?

Umbrella insurance is extra liability coverage. This type of insurance protects you from large claims or lawsuits that go above your other insurance policies. You might consider umbrella insurance if you’re at risk for being sued for property damage or other people’s injuries, such as a nanny or other employees who regularly work in your home. It can also protect your assets if someone sues you for slander or defamation of character. If you are starting to build up some wealth in your retirement accounts, are making good money, and have a paid-for home or at least sizeable equity, you need umbrella insurance. 

Umbrella insurance won’t cover damages that you make to your personal belongings. If you hurt someone on purpose, whether that means injuring them or damaging their property, umbrella insurance won’t cover the injuries you cause or the lawsuit that follows.

If you have wealth, you are at risk of being sued. It doesn’t matter how nice and friendly you are. And it definitely doesn’t matter how much time and energy you’ve put into getting out of debt, building savings, and growing your investments. All it takes is one nasty lawsuit take it all away. Protect your assets and experience the peace of mind that comes from knowing your wealth is off-limits to other people.

Umbrella insurance is extra insurance that provides protection beyond existing limits and coverages of other policies. It can provide coverage for injuries, property damage, certain lawsuits, and personal liability situations. Umbrella insurance helps protect your assets and your future in two ways:

1. It may provide coverage when your homeowners6, auto20, and boat insurance13 policies limits are exhausted.
2. It provides coverage for claims that may be excluded by other liability policies including claims like false arrest, libel, slander, and liability coverage on rental units you own.