March is National Umbrella Month, which makes it the perfect time to talk about one of the most overlooked — but incredibly important — coverages for families: an umbrella insurance policy.
Most people assume their home and auto insurance policies are enough. And for many everyday situations, they are. But what happens if you’re involved in a serious accident and the damages exceed your liability limits?
That’s where umbrella insurance steps in.
What Is an Umbrella Insurance Policy?
A personal umbrella policy provides additional liability protection above your home, auto, or other personal policies. It kicks in once your underlying liability limits are exhausted.
For example:
- A major auto accident with significant injuries
- A serious dog bite claim
- An accident on your property
- A lawsuit involving slander or libel
According to the Insurance Information Institute, the average cost of a bodily injury liability claim from an auto accident is over $26,000 — and severe injury claims can easily reach six or seven figures. Medical costs and legal expenses continue to rise, and jury verdicts are increasing nationwide.
Even more concerning: a 2022 report from Swiss Re Institute noted that large liability verdicts (often called “social inflation”) are becoming more frequent and more expensive.
If your liability limits are $250,000 — and a judgment is $750,000 — you’re personally responsible for the difference without an umbrella policy.
Who Should Consider Umbrella Coverage?
Umbrella insurance isn’t just for the ultra-wealthy. It’s often recommended for:
- Homeowners
- Households with teen drivers
- Families with significant savings or future earning potential
- Rental property owners
- Anyone who wants added peace of mind
At Smart Insurance Agency, we often tell clients that umbrella coverage is one of the most cost-effective ways to protect what you’ve worked hard to build.
If you’re unsure what your current liability limits are, now is a great time to review them. You can also read more about liability protection in our blog on Understanding Home Insurance Liability Coverage and explore our Personal Insurance Services page.
How Much Does an Umbrella Policy Cost?
Surprisingly, umbrella coverage is often very affordable — typically a few hundred dollars per year for $1 million in additional protection, depending on your household and underlying policies.
For many families in Southwest Missouri, it’s one of the smartest risk-management decisions they can make.
Since March is National Umbrella Month, consider this your reminder to review your coverage.
If you’d like us to take a look and see whether an umbrella insurance policy makes sense for your situation, we’re here to help.
📞 Call Smart Insurance Agency or request a review at smartinsuranceagency.com.