Skip to main content


Do you need an umbrella?

By John R. Berry


As you start to accumulate wealth, an umbrella insurance policy is protection worth considering. Umbrella coverage arches over your homeowner’s and auto insurance, adding extra liability coverage in the event that you exhaust your normal limits.


In addition to the increased liability coverage, umbrella insurance pays for legal defense in the event--however unlikely--that you personally are sued.1 I say personally because umbrella insurance does not provide protection for any business activities.

Coverage of $1 million is inexpensive in typical cases--just a few hundred dollars per year. That has the potential to be an excellent insurance value to cover the horrific unforeseen, such as a serious injury to a visitor on your property or to a passenger in a car you hit.

The financial education website Investopedia2 provides a brief list of circumstances in which umbrella policies might be suitable:

  • Long commute
  • Rush hour driving
  • Swimming pool ownership
  • Dog ownership
  • Frequent guests

Be sure to check with your advisor regarding what would be appropriate for your specific situation.

Life is unpredictable, and legal judgments can reach long into your future (including grabbing future wages).

I encourage you to contact your property and casualty insurance agent today to review your umbrella coverage. If you don’t have an umbrella policy, be prepared for some changes you might have to make. For instance, you may have to increase your underlying home and auto liability coverages. In addition, some umbrella issuers require you to have those other policies with them.

The opinions voiced in this material are for general information only and are not intended to provide specific solicitation of any insurance product or security, nor is it intended to be a substitute for specific tax or legal advice.

John R. Berry is owner of Corner Post Financial Planning.