What is an umbrella policy?

About umbrella policies

Umbrella liability coverage is a type of additional homeowners liability insurance. This type of insurance provides an extra layer of protection for homeowners, above the liability limits of the standard homeowners insurance liability coverage.

Umbrella policies can be purchased for homeowners, renters, condominium or co-op, or automobile insurance policies. Like standard liability insurance umbrella policies protect homeowners against lawsuits from injuries or property damage caused to others by the homeowners, their pets or children, anywhere in the world.

Umbrella liability insurance also includes additional coverage for things like libel, slander, or invasion of privacy claims brought against the homeowner. Umbrella coverage may be worthwhile for homeowners with additional property or savings or other investments that are worth more than the limits of the standard homeowners liability insurance coverage.

Umbrella policies only pay after the standard homeowners insurance policy has paid. The cost of this type of insurance is not prohibitive, but most insurers require that the underlying homeowners liability policy be at least $300,000.

Home insurance quotes for umbrella policies start at about $1 million in coverage for anywhere from $150 to $350, and can go up from there. Additional coverage may cost $75 to $100 for each million above that.