Umbrella Insurance: Why You Need Extra Coverage

Umbrella Insurance: Why You Need Extra Coverage Protecting your family and your investments is your number one priority. What happens when you’re involved in an accident and your insurance is simply not enough to cover the damages and other costs? This is why at TJ Woods, we understand that situations like this do happen. We offer an insurance policy, called umbrella insurance, that provides protection to your standard homeowner, auto, or boat insurance to take care of extra expenses and provide you the coverage you need.

What is Umbrella Insurance?

Umbrella insurance is extra liability insurance to protect you from major claims and big-ticket lawsuits by protecting your assets and your future. If your policy isn’t enough to pay for the damages, lost wages, or medical expenses of an accident or a lawsuit, then an umbrella insurance policy will be able to cover you. This policy kicks in where your underlying policy’s coverage left off and up to the limit purchased. You do not need to be wealthy to purchase this policy, but if you have a lot of possessions and property you want to keep safe, then this is important to have.

As an example to further explain this policy: let’s say your auto insurance pays $200,000 of medical expenses when you are involved in an accident, and you purchase an umbrella policy to cover you up to $1 million. In this accident, you are being sued for $800,000. Your auto insurance would pay $200,000 of the damages, and your umbrella policy would pay the remaining $600,000. If you did not have this coverage, then you would have to pay the remainder out of pocket, use your retirement money, or pay it off with your assets. If you have lots of assets to protect, it is wise to purchase additional coverage. Most provide between $1-$5 million, but it is possible to get more.

What is Covered under Umbrella Insurance?

Umbrella insurance provides excess coverage above and beyond what is provided by standard homeowner and auto insurance. It will cover:

  • Most motor vehicles including cars, RV’s, motorcycles, and most watercrafts.
  • Incidents involving any property covered by a basic homeowner’s policy.
  • If your basic homeowner policy provides business liability coverage (not all do).
  • Legal expenses you’ll incur if you are being sued.
  • Any incidents alleging slander, libel, defamation of character, invasion of privacy, and false arrest.

What is Not Covered under Umbrella Insurance?

Umbrella insurance is a form of secondary-personal insurance, so it will not protect you from these examples:

  • Any lawsuit related to your business.
  • No excess health insurance coverage.
  • No high-risk, unnecessary use of your vehicle (such as drag racing).
  • May not cover all types of vehicles like truck tractor trailers, farm tractors, or vehicles exceeding a certain weight limit (12,000 pounds).
  • Will not cover damage to your own car or damage to your own This is a liability policy, so it will only cover you if you’re held responsible for damage to someone else’s property.


It’s impossible to predict whether you might be involved in events like this, but it is better to be safe than deal with a devastating financial loss. If you have any concerns about being covered for a specific event, contact one of our professional agents at TJ Woods! We are glad to provide you with additional information on how an umbrella or additional insurance policy can protect you, your family, and your investments.