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What is a Personal Umbrella Policy?

A Personal Umbrella policy is a secondary form of Liability insurance that supplements a primary policy. The primary policies that are supplemented are also known as “underlying policies.” Although primary insurance policies offer a significant amount of protection, they have limits on the amount of coverage provided.  Umbrella Policies increase the limits of an underlying policy and an Umbrella policy offers protection across multiple, defined policies.

Can Personal Umbrella Policies Be Purchased Without Underlying Policies?

Personal Umbrella policies require underlying policies that they supplement. The primary policy also must maintain a specified minimum limit if coverage in order to purchase an Umbrella policy.

Who Should Purchase a Personal Umbrella Policy?

Anyone seeking additional assurances would benefit from an Umbrella policy.  Below are just a few scenarios where a policyholder should strongly consider purchasing an Umbrella policy:

  • Condo unit owners looking to protect their assets be increasing coverage limits
  • Individuals that may be targeted by opportunistic individuals filing legal suits
  • Landlords seeking additional protections from lawsuits filed by tenants
  • Homeowners hoping to increase their coverage limits over both their home and auto policies

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What Coverages are Available in an Umbrella Policy?

As previously mentioned, Umbrella policies supplement a primary policy by increasing the coverage beyond the underlying policy limits. Umbrella policies are important because they also provide protection above multiple policies such as a Homeowners policy and a Personal Auto policy.

Do Personal Umbrella Policies Cover Physical Property?

Coverage for a policyholder’s physical property is not offered in an Umbrella policy.  The Umbrella policy’s underlying coverage is designed to cover personal liability only, so an Umbrella would not respond to a personal property claim.  In contrast, a Personal Umbrella may respond to excess liability required to settle a loss resulting from Property Damage or Bodily Injury to others.

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Are Personal Umbrella Policies the Same as Excess Liability Policies?

While Personal Umbrella and Excess Liability policies are both forms of supplemental liability coverage, they provide different levels of secondary protection.

  • Excess Liability, are designed to adopt the terms and conditions of a single underlying policy. Excess policies only increase a primary policy's liability limits.
  • Umbrella policies, also offer increased liability limits to a primary policy.  However, they provide a coverage across multiple underlying policies.

Generally speaking, an Umbrella policy provides a more robust range of coverage rather than simply increased liability limits since they can provide coverage across multiple policies.

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Are Personal Umbrella Policies Expensive?

A typical Personal Umbrella policy is written to provide a minimum of $1 Million in personal Liability coverage.  Many policies offer a maximum coverage limits of $5 Million.  Despite the high limits of protection offered, Personal Umbrella policies remain very affordable. A driving factor that allows Umbrella policies to be so affordable is that they are secondary policies rather than a primary policy.

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How Can Massachusetts Residents Purchase a Personal Umbrella Policy?

When shopping for an Umbrella policy, individuals must fully review their underlying policies to be certain that they meet the minimum limits required of an Umbrella policy.  This generally requires time and a great understanding of your current underlying policies.  Our agents have the experience and knowledge to help identify which policy protections fit your needs, while securing the most affordable rates to compliment your underlying policies.

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