Family with kids playing soccer in their yard

What is Umbrella Insurance? 

by Kristin Smith

While you probably have car and home insurance, do you have the insurance protection you need if you or someone in your household caused a major accident or someone was severely injured in your home or car? When your liability exceeds your policy limit, it can lead to large financial expenses and devastating lawsuits.  If this happens, you may be responsible for paying the difference out of pocket. That's why it’s important to know how an umbrella insurance policy can protect you and your family.   

Umbrella insurance is additional liability coverage that goes beyond the limits of your existing car and home insurance.  It could provide an extra layer of protection in case of a catastrophic event or a high-value lawsuit.  

What does umbrella insurance cover? 

Liability insurance covers expenses for injuries or property damage to others that you are legally responsible for. If you cause a major accident, injure someone resulting in significant medical costs, and/or have a lawsuit filed in relation to a covered claim, standard car and home insurance with a limited level of liability coverage may not be enough. Umbrella insurance provides an extra layer of protection for major events and lawsuits and is designed to cover costs that exceed the limits of other insurance policies, protecting your assets and future income.  

Why would I need umbrella insurance?  

Standard insurance policies have predefined coverage limits. If you have a claim that exceeds these limits, you could face significant out-of-pocket financial expenses. Umbrella insurance bridges these gaps by providing additional coverage beyond what your primary policies offer, helping to make sure you don't have to drain your savings and retirement funds or are forced to liquidate your assets to settle a claim. 

Who needs umbrella insurance?  

Homeowners with families 

Umbrella insurance offers peace of mind, especially for families with homes and significant assets.  

Accidents at home 

Homeowners face various risks, including accidents on their property, injuries to guests, or property damage caused by negligence. If a guest or visitor is injured on your property, you may be held liable for medical expenses and other damages. 

Children’s activities 

Families with children are exposed to various liability risks. Accidents can happen. If your child causes injury to another person or damages someone's property, you may be held responsible.  

Inexperienced drivers  

If you have a teenage driver in your home, you understand the risks each time they back out of the driveway. Inexperienced drivers have a higher risk of a car accident. If that accident causes damage to multiple cars or property and results in significant injuries, you could quickly exceed the liability limits in your auto insurance.  

Accidents can happen at any time, and it only takes one bad decision or driving mistake to lead to an event that could jeopardize your financial security.  

High-net-worth individuals 

High-net-worth individuals often become targets for lawsuits. An umbrella insurance policy could provide extra protection for those individuals to help protect against legal judgments and costs associated with lawsuits.


If you own rental properties, you could face liability risks associated with accidents or injuries that happen at your rentals. Umbrella insurance can provide additional liability coverage beyond the limits provided in your landlord insurance policy, safeguarding your rental income and assets. 

How much is umbrella insurance?  

Umbrella insurance is remarkably affordable considering the level of coverage it provides. Compared to increasing the limits on individual policies, opting for umbrella insurance offers a cost-effective solution. With an umbrella policy, you can secure a million dollars in coverage, often for just a few hundred dollars a year, depending on your specific needs and the level of risk you have. Rates vary based on your unique situation and needs, so contact an insurance agent for a personalized quote.  

Is umbrella insurance right for me? 

Umbrella insurance can help shield your assets, including your home, investments, savings, and retirement accounts, from the financial responsibility of a major event or a lawsuit. 

Contact your insurance agent to discuss your needs and find out if umbrella insurance would be right for you.  


Updated 6-7-23

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COUNTRY Financial® is a family of affiliated companies (collectively, COUNTRY) located in Bloomington, IL. Learn more about who we are.

Umbrella insurance policies issued by COUNTRY Mutual Insurance Company® and COUNTRY Casualty Insurance Company®, Bloomington, IL.

Examples provided are for illustrative purposes only and all claims are subject to policy terms and conditions.