What Is Umbrella Coverage? Do I Really Need It?

You know about homeowners insurance and you’ve always had auto insurance. But what do you know about umbrella coverage as an additional liability insurance ?

Personal liability coverage on your auto and home insurance policies have limits. When an unexpected event finds you legally liable for settlements, the jury may award an amount that exceeds your policy limits. More often than not, lawsuits related to auto accidents or incidents on personal property exceed the standard allotted insurance limit. That’s where an umbrella policy is helpful.

What is Umbrella Coverage?

Umbrella insurance will pay legal fees and any monies a jury awards from your personal liability case.

Your assets and lifestyle are at risk when you’re facing a personal liability lawsuit. In Texas, your life can be turned upside down when you are found personally liable for damages. If a jury awards damages that exceed your liability limits, then money from your checking, savings, investments, and inheritances must cover the remainder. You can also face wage garnishment and a significant shift in disposable income.

What If I Don’t Have Assets?

What if you don’t have that much money? Everyone doesn’t have $500,000 in the bank, so the courts are left to decide. While you will be afforded one vehicle for primary transportation, you may be forced to sell any additional vehicles.

Your family’s primary home will also be at risk. The court will allow you to continue living in your home, but a lien may be placed on the property. If you decide to sell your home, all proceeds will be taken and applied towards the lawsuit damages. Any rental properties you own will be taken and sold for the lawsuit damages, as well.

No one plans to cause an accident that costs over $500,000, but the average personal liability claim exceeds standard limits. An unexpected event puts your hard-earned assets at risk. Personal umbrella insurance provides additional liability limits. Your umbrella policy will provide $1M to $10M of coverage to protect you and your family’s lifestyle.

What Does Umbrella Coverage Insure?

Personal umbrella insurance provides additional liability coverage for you and your family. An accident involving bodily injury or property damage caused by a member of your family will be protected by the umbrella policy.

  • Cars and motorcycles
  • Land toys like ATVs, RVs, trailers, golf carts
  • Water toys like boats and jet skis
  • Accidents that happen at your primary residence or other property
    • Swimming pool accidents
    • Dog bites
    • School fights when your kid breaks another kid’s arm
    • Firearm accidents
    • Slip & fall inside your home
    • Trip & fall on your sidewalk
    • And so many other off-the-wall incidents that aren’t in your plans

Do I Need Umbrella Coverage?

Do you have cars, property, toys, and investments? If you work hard for your family, then you need personal umbrella insurance.

When you research average punitive damages awarded in personal liability claims, you will learn that your current assets won’t cover the total costs. No one plans on causing an accident, but planning for the unexpected is the point of insurance. It’s not if an incident will happen, it’s when.

Sure, planning for hail season in Texas is more predictable. But you don’t have to be a millionaire to get sued like a millionaire. Umbrella insurance is a low-cost protection that you can add to your homeowners and auto insurance. The umbrella policy add-on also makes you eligible for a multi-line discount that offsets a large portion of the premium.

You should talk to your insurance agent about umbrella coverage, if you:

  • Have nothing to lose, because a judgment against you will leave you with nothing.
  • High net worth individuals who want to protect their assets against a big liability judgment.
  • Spend a lot of time on the road, thus at higher risk of car accidents.
  • Host events or dinners in your home or have people over to play in the pool.
  • Own multiple homes or investment properties.

Why Do I Want An Umbrella Policy?

Personal liability cases happen every day. If you are facing a bodily injury or property damage claim, then your financial well-being is at risk. Whether you are a homeowner, renter, business owner, or driver on the road.  Every claim doesn’t end up as a lawsuit, but every lawsuit ends with a judgement and compensation. You have a lot to consider when weighing your risk and everyday incidents that could lead to a personal liability lawsuit.

  • Someone is injured while in your home or your pool.
  • You’re at fault in a car accident while driving in Italy on vacation.
  • A neighbor’s kid gets hurt playing on play equipment in your backyard.
  • Your dog bites somebody.
  • Someone slips down the stairs in your house.
  • Someone sues you for libel, slander, invasion of privacy, or defamation.

Liability cost from a single accident can spiral out of control between legal fees and medical cost. Your current home and auto insurance policy will cover up to their respective limits. But you are putting your financial assets, your home, and your entire future at risk when the limits are met. That gap is where umbrella coverage provides the protection you need.

The High Cost of Liability

Lawsuits are prevalent now more than ever. A single incident can have a dramatic effect on your life. Let’s use a car accident as an example. Texas requires all drivers to carry, at minimum, the following types and amounts of auto liability insurance:

  • $30,000 per injured person
  • $60,000 per accident (injuries)
  • $25,000 per accident (property damage)

Medical cost resulting from a car accident can be devastating. The average cost of a broken leg is $90,000, which far exceeds the state minimum coverage. Auto claims increase every year, often climbing to hundreds of thousands of dollars. Judgements from auto insurance claims can also include compensation for loss of income and pain and suffering. If you are found responsible for a car accident, then you bear the financial burden of paying the amount due above what your auto insurance covers unless you have an umbrella policy.

Claims for injuries at your home can create similar circumstances. Your financial responsibility can far exceed your home insurance payout, when you are liable for an event that occurred on or off your property.

An umbrella insurance policy gives you peace of mind. You can rest easy knowing you are covered beyond the limits of your home and auto policies. Whether an incident happens on the road, at your home, or on the playground, your assets won’t be at risk.

How Much Does Umbrella Insurance Cost?

Umbrella coverage extends the limits of your underlying liability coverage for as little as $300 annually. Contact your insurance agent to get an accurate quote for umbrella coverage based on your assets. A small price considering the cost to you when someone is injured and you are found liable.

Even though accidents aren’t planned, these unexpected and unintentional events can cost well into the million-dollar range. The insurance you have may be structured to meet minimum state requirements for basic protection. Umbrella coverage protects you and your assets by affordably providing coverage above your current policies.

The extra layer of umbrella insurance gives you added coverage for personal liability loss. Protect your money, assets, and future debt that often accompany personal injury settlements and jury awards.

How Do I Get Umbrella Coverage?

There are many factors that go into calculating your insurance risk, coverage, and premiums. Are you looking for insurance in McKinney, Prosper, Frisco, or surrounding areas? You’re one call away from committed and knowledgeable insurance agents. Paine Insurance Group will dive in and explain how umbrella insurance can work for you. Make sure you have the right insurance policies to protect what matters most to you. 

Paine Insurance Group is dedicated to being the best insurance agency in McKinney.


There is no “one size fits all” when it comes to protecting your family, and we spend the extra time to tailor plans specific for your needs. Our agents focus on follow-up and follow-through to protect the things and people that matter most to you. We would love to answer any questions you have about insurance coverage and options in McKinney. Call Paine Insurance Group today at 972-316-9517 or visit us Monday through Friday. We are located at 3400 Eldorado Parkway, Suite 4, McKinney, TX 75070.


  • This field is for validation purposes and should be left unchanged.

Connect with us :

Paine Insurance Group
3400 Eldorado Parkway, Suite 4
McKinney, TX 75070

Get in touch with us through: