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  • Writer's pictureMichael Goodman

Do I need an umbrella insurance policy?

Updated: Jun 6, 2023

Updated: Oct 6, 2022

Do I need an umbrella insurance policy?
Do I need an umbrella insurance policy?

Samuel just bought a brand-new car! Congratulations that is a very nice ride, Samuel.

Samuel immediately runs a stop sign, T-boning a family of 6. Unfortunately, the family of 6 all perish in the accident; Samuel survives the accident, barely.

Samuel has insurance. Samuel has what the state requires for auto insurance. Samuel's insurance policy won't even begin to cover the amount of damage that was just done. Samuel was legal. Samuel was also greatly underinsured.

How could Samuel add a layer of extra protection between him and the other driver? There are many answers, but I will start with a couple.

  1. Increase the liability limits on his auto insurance policy.

  2. Purchase an umbrella policy that will serve as "extra" on top of his auto insurance policy so that in the case where his limits are "exhausted" or used up, he has more protection.

Umbrella policies are typically very affordable because to purchase an umbrella policy; one must have an insurance policy in place already that will serve as the "underlying" policy or, in other words, the policy that stands in front of the umbrella. I'm not saying umbrellas are a "steal." Still, I am saying that for the amount of protection provided, it is typically very affordable, especially when considering the alternative of not having an umbrella. Most umbrella policies start at policy limits of $1 Million and go as high as $20 Million. Often the insurance company offering the umbrella will require a minimum limit of liability on the underlying policy it is covering.

Mike Goodman, Agent


Do I need an umbrella insurance policy?
Do I need an umbrella insurance policy?

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