Insurance
umbrella liability insurance
Umbrella liability insurance adds extra liability coverage on top of your home and auto policies. It pays after those limits run out.
Umbrella liability insurance is a policy that adds extra liability coverage above the limits on your home, auto and similar policies. If a claim passes those limits, the umbrella policy pays the next layer, up to its own limit. It can also cover some claims your other policies leave out, depending on the policy.
A round example. For example, say a guest is hurt at your home and a court awards $1,200,000. Your homeowner's policy pays up to its $300,000 limit. An umbrella policy with a $1,000,000 limit pays the remaining $900,000. These numbers are for illustration only and do not describe any policy.
What it protects. Savings, home equity and future income can all be reached by a large judgment. Families with more assets, teen drivers, rental property or a pool often review coverage.
Why it matters to your plan. A lawsuit can undo years of saving meant for retirement and for giving. Review limits when your net worth changes. Seek First reviews property insurance under Risk Management. See our insurance review guide.
Related terms
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