Top 5 Myths about Umbrella Insurance—Busted

Umbrella insurance is one of the most misunderstood types of personal insurance, and because of that, many people skip it entirely. But the truth is, this low-cost coverage can be the difference between financial security and financial devastation in the event of a major liability claim.

Today, let me clear the air and bust the top 5 myths about umbrella insurance.

Myth #1: “I Don’t Have Enough Assets to Need Umbrella Insurance”

Busted: Umbrella insurance doesn’t just protect your assets; it protects your future income, too. If you're sued for damages that exceed your homeowners or auto liability limits, a judgment could follow you for years. According to the Insurance Information Institute, 12% of personal injury liability claims result in settlements exceeding $1 million. You don’t need to be wealthy to be at risk.

Myth #2: “It’s Too Expensive”

Busted: Umbrella insurance is surprisingly affordable. A $1 million policy typically costs between $150–$300 per year, depending on your risk profile. That’s less than $1 per day for a massive boost in protection across your auto, home, and other covered liability exposures.

Myth #3: “I’m Already Covered by My Auto and Home Policies”

Busted: True, but only to a point. Standard homeowners and auto insurance policies usually cap liability coverage between $300,000 and $500,000. Umbrella insurance kicks in after those limits are exhausted, covering additional damages and even legal defense costs.

Myth #4: “Umbrella Insurance Only Covers Auto Accidents”

Busted: Auto accidents are a common source of claims, but umbrella insurance also provides broad liability coverage, including:

Dog bites
Slander or libel lawsuits
Rental property incidents
Accidents on your property
Injuries involving watercraft or recreational vehicles

Myth #5: “My Family Is Careful—We’re Not at Risk”

Busted: Accidents happen, even to cautious people. Your teen driver could cause a multi-car pileup. A guest could fall at your home. A social media post could result in a defamation lawsuit. Umbrella insurance is protection for the unexpected.

Protect What Matters Most

Umbrella insurance is the safety net you didn’t know you needed, and it’s more affordable than you might think. If you own a home, drive a car, or host others on your property, you owe it to yourself to explore this important coverage.

Want to learn more? Contact our office today and let’s talk through your options.