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Umbrella Insurance in Maryland
An umbrella policy adds a layer of liability protection, usually $1 million or more, on top of your home and auto insurance. For many families it's the most protection per dollar they can buy.
How an umbrella works
Your auto and homeowners policies each have a liability limit. If a claim against you is larger than that limit, the umbrella pays the rest, up to its own limit. Picture a serious accident where the injured driver's damages reach $900,000 and your auto policy's limit is $300,000. Without an umbrella, the remaining $600,000 is your problem. With a $1 million umbrella, it's covered.
Why it matters more than people think
- Serious injuries are expensive. Medical bills, lost wages and pain and suffering from one bad accident can exceed a standard auto limit quickly.
- Your future income is exposed. A judgment larger than your coverage can lead to wage garnishment, not just a hit to your savings.
- Defense costs add up. Umbrella policies generally pay for your legal defense on covered claims.
- It covers your household. Family members who live with you, including teenage drivers, are generally covered too.
What carriers require underneath
Every umbrella requires you to carry certain liability limits on your auto and home policies first, and those limits vary by carrier. Some carriers will only write an umbrella over their own auto or home policy. That's a big reason I quote home, auto and umbrella together: the cheapest auto policy isn't always the one that lets you add the best umbrella.
Frequently asked questions
What does an umbrella policy cover?
It pays liability claims after your home or auto liability limit is used up, such as a serious car accident or a guest badly hurt at your house. Most umbrella policies also cover some claims your other policies don't, like libel or slander, and they pay for your legal defense.
Who should consider an umbrella policy?
Anyone with more to protect than their home and auto liability limits: home equity, savings, investments or a strong income. It's especially worth a look if you have a teenage driver, a pool, a dog, rental properties or a public profile.
How much umbrella coverage do I need?
Umbrellas are sold in $1 million increments. A common starting point is enough to cover your net worth plus a cushion for future earnings, since a court judgment can reach your wages too.
Do I need to have my home and auto with the same company?
It depends on the carrier. Every umbrella requires minimum liability limits on the policies underneath it, and some carriers will only write an umbrella over their own auto or home policy. I check those requirements before I quote.
Does an umbrella cover my business?
No. A personal umbrella covers personal liability. Business activities need commercial coverage, including a commercial umbrella if the business needs higher limits. See small business insurance.
Related coverage
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