What Are Umbrella Insurance Policies?

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(KTVI) - There are many things to consider when building and protecting your retirement savings. One of these things is an umbrella policy, which is a general liability policy providing coverage when someone files a lawsuit due to negligent acts resulting in personal injury, property damage, or personal claims against you. Matt Allgeyer, Financial Planner with Wamhoff Financial Planning & Accounting, discusses umbrella policies.


  • Provides additional liability coverage.
  • Low Cost. $1 Million in coverage normally can cost $150 - $300 per year, with an addition $1 Million in coverage ranging from $75 - $150 more.
  • Provides protection beyond normal liability policies.
  • In the event that you are sued for an amount higher than your primary policy allows, you are looking at taking that away from your savings and investments. An umbrella policy helps avoid this.


  • It is an additional cost.
  • You may never need it.
  • It is secondary coverage, so it kicks in after your initial policy.
  • Individually owned policies do not cover damages from business operations.
  • Intentional acts and punitive damages are not covered.


  • Analyze your current coverage and know what your benefits and limits are.
  • Consider whether you are willing and able to carry the loss if something occurs. If the answer is no, you may want to look into an umbrella policy.
  • If you make more than $100,000 per year or have over $1 Million in assets, you should purchase at least $1 Million in umbrella coverage.
  • If you have rental property, you should have closer to $3 Million - $5 Million in coverage.
  • The average family purchase of umbrella coverage is $2 Million..

Your best rates for umbrella policies will normally come from either your auto or homeowners insurance carriers.

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