Do I Need an Umbrella Policy

Published by crgservices on

Today’s increasingly “sue-happy” society has made it that nearly every other commercial on TV is an attorney’s advertisement. They promise that one phone call is all it takes to get you large sums of money for that one time you were injured. These ads will keep running and people will keep making their “one call”, so the answer to the posed question is an easy one, yes. An umbrella policy is always a good idea.

What’s an umbrella policy?

First, let’s go over the basics of an umbrella policy. There are umbrellas for individuals and for businesses.

The coverage provided by an umbrella policy is pretty universal in that it offers additional liability coverage by million-dollar increments. What the heck does that mean?

Auto and home

On your auto and home policies, you have certain limits of liability coverage. On an auto policy, your liability coverage covers any damage or injury you cause to another party.

For your home policy, this covers any injury to a non-household member on your property or damage you cause to a third party. An umbrella policy has extra coverage if the limit of liability on your home or auto policy has been exhausted.

Umbrella Specifics

Coverage can range from $1 million all the way to $10 million with some carriers. What may surprise many people is how inexpensive an umbrella policy actually can be.

A typical policy can start at roughly $150 per year!

Now, this depends on how many drivers you have in the household, how many vehicles, boats, toys, or different properties you own, among other price-determining factors.

The premium can also fluctuate due to claims and driving history, and some carriers may not even offer an umbrella at all depending on this history.


So you’re probably thinking, “wow I should just add a $1 million dollar umbrella that will give me extra coverage to my low limit auto policy.” Unfortunately, you may not be able to.

There are requirements in order to have an umbrella policy. The minimum liability coverage required on an auto policy is either 250,000/500,000/100,000 or 500,000 combined single limit (CSL).

250,000/500,000/100,000 – $250,000 limit per person (injuries), $500,000 limit per accident (total paid out for an accident), $100,000 property damage (damage to other vehicle/property).

500,000 CSL – $500,000 combined single limit, meaning one pool of money to pay for third-party injuries and property damage.

Generally, the required liability coverage on a home policy is $300,000.

As long as you have these limits or higher, you have the required underlying coverage to have an umbrella policy.

Let’s say you have one of your policies with another carrier.

If the liability limits are not at least the minimum required, you would be responsible for payments between your coverage limit until you reach the required limit before the umbrella coverage kicks in.

For example, an auto policy with a different carrier 100/300/100 = $200,000 gap you are responsible for until umbrella kicks in (500,000-300,000 = 200,000).

Just be sure your agent is aware if you have policies elsewhere!


The benefits of having an umbrella policy are enough to question why you don’t have one already.

First, an umbrella policy gives you peace of mind that you have a significant amount of extra coverage in case anything serious were to happen.

Obviously, everyone hopes it never happens to them, but in the event, you do need to use your umbrella coverage, it can be a lifesaver.

Relating back to the attorney commercials, an umbrella gives you the extra cushion if you were to ever be deemed liable for a serious accident and taken to court.

Lawsuits often come with a mountain of legal fees, which makes an umbrella extremely valuable.

Lastly, as we touched on before, an umbrella policy is very much worth the price each year.

How we help

Your agent is ALWAYS available for discussing any type of change to your policies. If you have any questions, feel free to reach out to them! They can give you recommendations for coverage that suits your specific situation.

If reading this has motivated you to get a quote for an umbrella policy, please contact your agent. We can also tweak your policies if you do not currently meet the required coverage limits.

You already have the peace of mind knowing a trusted CRG agent is on your side. Being able to have open conversations about protecting what matters most is extremely beneficial.

If you know of someone who could benefit from the services of a CRG agent, forward this to them!

If there is a specific topic or insurance-related question you would like discussed/answered in a future newsletter, let us know!