Nadler Insurance
Insurance EducationVideo

Coverage Explanation: Umbrella Insurance

By Zach Nadler·

Show Notes

Quick summary

Umbrella insurance is an extra layer of liability protection that sits on top of your underlying policies (usually auto and homeowners/renters). This episode explains what an umbrella policy is, when it can help, and how to decide if it makes sense.

What umbrella insurance typically helps with

  • Larger liability claims that exceed your auto or home liability limits
  • Legal defense costs related to covered liability claims
  • Certain situations that may not be as well-covered by underlying policies (varies by carrier and form)

    • How it works (the simple version)

  • You have underlying liability limits on auto and home/renters.
  • If a covered claim exceeds those limits, the umbrella can respond above them.
  • Umbrella policies often require you to carry certain minimum underlying limits.

    • Common examples (confirm from video)

  • A serious auto accident with injuries that exceed your auto liability limits
  • A guest injury claim that turns into a large lawsuit
  • A liability claim involving your household members

    • What an umbrella usually does not cover

  • Damage to your own property (that is property coverage)
  • Business activities (often needs separate business liability)
  • Intentional acts

    • Who should consider an umbrella

  • Households with higher assets or income to protect
  • Drivers with teen drivers or frequent driving exposure
  • People who host often (pool, gatherings, pets, etc.)
  • Anyone who wants extra peace of mind beyond standard limits

    • Questions to ask when reviewing an umbrella

  • What underlying limits are required for auto and home?
  • Does it include UM/UIM umbrella coverage (if available)?
  • Any exclusions specific to my lifestyle or property?
  • What is the premium difference between $1M and $2M limits?

    • Video

  • Watch here: https://youtu.be/ZfMI1OGkU4E?si=KKFk11M3eFfjQRtB

    • Notes