Person signing paperwork with justice scales in front of them

Protect Your Finances with Umbrella Insurance

Updated May 4, 2024 . AmFam Team

Whether on the road or at home, you do what you can to keep yourself and those around you safe. But accidents happen — and sometimes they can lead to pricey lawsuits. Have you ever considered what you’d do if you were sued for something like accidentally injuring a guest on your property or being at fault for a major car accident? How would you cover the expenses? The primary liability coverage on your home, auto or recreational vehicle insurance may not cover all the costs. If you owe more than what your primary insurance covers, you’ll be left paying out of pocket.

That’s where umbrella liability insurance comes into play — consider it proactively planned financial protection in the event of a lawsuit. How does it work? Let’s take a look.

5 Things You May Not Know About Umbrella Insurance
What can umbrella insurance do for you? We're glad you asked.

Umbrella Insurance for Financial Protection

Did you know that the National Highway Traffic Safety Administration estimates over six million car collisions occur annually in the U.S.? Or that the Center for Disease Control and Prevention also estimates about five million dog bites annually and over one million slip and fall accidents per year?

It can be a bit daunting to look at statistics like this, but it’s important to understand the risks in order to properly protect yourself.

If you’re at fault for an accident or injury and faced with a lawsuit, you may be required to pay above and beyond the primary liability limits on your homeowners, auto or recreational vehicle policy, especially if there are serious injuries. What would you do if this were the case? You may have to sell some of your assets, drain your bank account or hand over future earnings.

But this doesn’t have to happen.

Personal liability umbrella insurance may help protect all the things you work so hard for. If you have a liability lawsuit against you, umbrella insurance may help cover beyond what your primary liability coverage will pay for — which may help keep your assets, savings account and future earnings safe and sound.

Umbrella Insurance Facts

Umbrella insurance has a few key benefits and facts that make it a great choice to help protect what matters most to you. Here are a few things you should know about umbrella insurance:

  • Extends beyond your primary insurance to help cover bodily injury and property damage you are liable for.
  • Helps financially protect you if you’re sued for libel, slander or defamation of character.
  • Helps cover your attorney fees and other costs related to your defense in addition to the limit of your policy.
  • Coverage may extend to recreational vehicles, like motorcycles, boats, snowmobiles and ATVs.
  • Limits start at $1 million with the option to increase in million-dollar increments.
  • Provides affordable peace of mind you’re protecting what matters to you.

It’s something you hope never happens, but if you are sued, you’ll be happy you were proactive about protecting your financial well-being by adding umbrella insurance. Ready to get covered? Connect with your American Family Insurance agent and they’ll walk you through everything you need to know.

This article is for informational purposes only and based on information that is widely available. This information does not, and is not intended to, constitute legal or financial advice. You should contact a professional for advice specific to your situation.

The information on this webpage represents only a brief description of coverages, is not part of your policy, and is not a promise or guarantee of coverage. If there is any conflict between this information and your policy, the provisions of the policy will prevail. Insurance policy terms and conditions may apply. Coverage features and limits vary by state and may be subject to change. Some products are not available in every state. Discount availability and eligibility vary by state and policy terms. (Discounts apply to auto and property policies.) Please check with your agent and read the policy for exact details on coverages and exclusions.

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