Umbrella Insurance

How to protect yourself and your family if you get sued and what to do before you get sued!

What you'll discover in this report:

  • How easy and common it is to be the target of a lawsuit
  • How to get massive protection for just pennies a day
  • What you should know about what's not covered with umbrella insurance
  • Tips on how to save money
  • Insurance jargon demystified.

What are you really getting? Find out here ... and much, much more!


If insurance is for a rainy day, umbrella insurance is for a storm! It’s for a day when someone hits you with a lawsuit for hundreds of thousands, possibly millions of dollars.

How Far Will Your Current Protection Really Go to Protect You?

Example. Say you're at fault in an auto accident that causes serious injuries to the driver and/or passenger(s) in the car you hit. Your auto insurance has liability limits of $100,000 per person and $300,000 per accident. These are pretty common limits, even for people with a lot of assets.

How far do you think $100,000 will go, particularly if the persons involved suffer injuries that keep them from working for months, or years? The accident victims could sue you for medical bills, lost income, even pain and suffering. In this scenario, $100,000 is not nearly enough coverage.

Guess what happens if you are hit with a judgment for $250,000 in the case of one person involved in the accident. Your auto liability insurance will cover the first $100,000 – and you're stuck with the rest. Again, that doesn't include the legal fees you have to pay to your attorney. And, in some cases you might have to pay all or part of the legal fees the other party or parties incur.

If you don't have a combination of insurance and cash on hand to pay the judgment, the court can order liquidation of your assets (including your family's home). In the state of Massachusetts, if you still owe money after these resources are exhausted, the court can order you to pay a percentage of your future earnings. This is called wage garnishment.

Umbrella insurance is for these very rainy days. While it may seem unnecessary, it really isn't, particularly for people with homes and other significant assets to protect. Do you really want to hand over your home, savings, or future earnings to someone you injure in an auto accident? It could happen. But it doesn't have to.

Umbrella Insurance: Massive Protection for Pennies a Day

Because it is designed for those very rare rainy days, umbrella insurance is cheap. It is also versatile. Umbrella insurance provides additional liability coverage not only for your auto policy, but also for your homeowner’s or renter’s policy.

If you have "extras " such as boats, motorcycles, ATVs, snowmobiles, or a motor home, the umbrella coverage can be designed to provide additional liability protection for these possessions as well.

* Note. Umbrella insurance doesn't cover everything. For example, if you are sued and the court assesses punitive damages against you, those damages won't be paid by your umbrella insurance. Punitive damages are awarded to someone in order to punish the person being sued. Punitive damages are awarded for outrageous, totally reckless conduct.

You can usually buy an umbrella policy with a $1 million limit for $150 to $250 per year, depending on the number of cars, homes, "toys," and young drivers in the household. If you need more than a $1 million limit, you can usually buy each extra $1 million of coverage for $100 to $200. Think about this. For only a few hundred dollars, you can increase your per-person liability limits five times, 10 times, or more – and it applies to your auto, homeowners or renters, and "extras” as well.


Umbrella Coverage: How It Works

Umbrella insurance actually "sits" on top of your auto, homeowners or renters, and other policies with liability coverage. Say you have a per-person liability limit of $250,000 on your auto policy. Say also that you cause an accident in which a driver or passenger in the other car is ultimately awarded $450,000 for injuries and loss of income.

Your auto policy will pay the first $250,000, and your umbrella will kick in the remaining $200,000.

Because umbrella policies provide coverage over the top of the auto, homeowners, or renters liability limits, some insurers offering umbrella policies require you to have your auto and homeowners policies with them as well. That's not typically a problem because most insurers are happy to be able to provide someone's auto, homeowners or renters, and umbrella insurance, and often offer multi-account discounts, which reduce your costs even more. We also represent companies that can write a "stand-alone" umbrella in those cases where you need to place your auto and home coverage with different insurance carriers.

Most insurers offering umbrella coverage require you to have liability limits of a certain amount on your auto and homeowners policies. The cost for increasing your underlying policies to these limits is fairly minimal.

Our licensed agents will be happy to assist you in reviewing your options and finding the best combination of coverage and value for your budget and your family's needs. Call Eastern Insurance to discuss umbrella coverage at 800-333-7234, press option “2”.