Personal umbrella policy protects you from large liability loss


Just owning property, driving a car or having a boat are among the scenarios that bring potential for a large liability loss.

Let’s celebrate one of the world’s most useful inventions, umbrellas! They come in many different types from a brolly to bumbershoot and a parapluie. But why stop there? While umbrellas help keep us dry from the rain, a personal umbrella insurance policy helps protect you from the financial consequences of a large liability loss.


Basic Policy – No Umbrella Basic Policy – With Umbrella
  • You get sued.
  • ·You have $300,000 in liability coverage for the basic policy involved (auto or homeowners).
  • You’re found liable for $1,000,000.
  • The underlying policy pays $300,000
  • You’re on the hook for $700,000.


  • You get sued.
  • ·You have $300,000 in liability coverage for the basic policy involved (auto or homeowners) + a $1,000,000 umbrella policy.
  • You’re found liable for $1,000,000.
  • The underlying policy pays $300,000 and the umbrella policy kicks in, because the $300,000 underlying limit has been met and the umbrella pays $700,000.
  • Your liability is satisfied.


Potential for Large Liability Losses

In today’s litigious environment, any loss exposure can lead to a lawsuit, which could result in a large settlement or judgment with the potential to deplete an individual or family’s bank accounts, retirement savings or college funds. Even the threat of a lawsuit, or one that is ultimately dropped or found groundless, can be very expensive because of the cost of defending the suit. Just take a look at USLAW’s 2019 State Judicial Profile by County.

Real-World Scenarios

You can encounter these possibilities by simply owning property; driving a car; having a dog, boat or pool; being a parent chaperone; leaving a negative review online; or experiencing unusual or unforeseen situations, such as causing an accident in a rented car while traveling in a foreign country. The potential for large liability losses is not just for wealthy or high-profile celebrities.

Factors Fueling Large Verdicts

Some factors leading juries to award large verdicts include: the big business versus the individual mentality, emotional stories that tug at jurors’ heartstrings, and the emergence of litigation funding where third parties invest in lawsuits by paying the parties or lawyers in exchange for an interest in the judgment or settlement.

Peace of Mind

Because the extent of an injury can be a matter of chance and the potential for loss cannot be known, personal umbrella liability insurance offers a basis of security and provides peace of mind. So, now that you know that it’s National Umbrella Month, celebrate by contacting your independent insurance agent who can help you find the umbrella coverage you need — based on your lifestyle, hobbies and activities — to protect your assets and future earnings.

The hypothetical sample claim scenario presented in this article is offered for educational purposes only. Every claim is adjusted according to its own specific set of facts. Whether or not insurance coverage would apply to any claim depends on the facts and circumstances of each case and the terms, conditions and exclusions of each individual policy.

Neither The Cincinnati Insurance Company nor its affiliates or representatives offer legal advice. Consult with your attorney about your specific situation. Contact your local, independent insurance agent for coverage advice and policy service.

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2 Responses to “Personal umbrella policy protects you from large liability loss”

  1. Sandi Manning

    Excellent article, Helen! Very useful information!

  2. Cindi Hollerbach

    It’s important to know the excess UM/UIM that can be purchased as well for an additional charge. My sister was in a horrible head on collision several years ago with four of her children. Her and my Cincinnati agent now uses this as his example to have the excess UM/UIM added to your Umbrella as well!! I have one now with Cincinnati too! Great article!!

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