Please ensure Javascript is enabled for purposes of website accessibility

Demystifying Umbrella Insurance: FAQs and Helpful Tips

Demystifying Umbrella Insurance: FAQs and Helpful Tips

The liability component of a standard policy, such as auto, home, or renters insurance, has a definite limit. Purchasing an umbrella insurance policy can cover liabilities beyond such limits. It helps to protect your assets if you’re liable for “excess” third-party injury or property damage liability. Here’s what you need to know to maximize your liability protection with an umbrella cover.

What is the Cost of Umbrella Insurance?

A $1 million umbrella insurance policy costs between $150 and $200. However, doubling the coverage to $2 million doesn’t double your premiums.

Are Umbrella Insurance Premiums Tax Deductible?

Your premiums may be tax deductible for commercial umbrella insurance as a business expense. This isn’t usually the case with a personal umbrella policy. That said, covering your excess rental property liability under personal umbrella insurance may qualify the premiums for tax deductions.

How Much Umbrella Insurance Do I Need?

To estimate your umbrella insurance coverage, consider factors such as:

  • Value of personal assets on the hook if you face excess liability claims
  • The degree of your bodily injury/property damage risk as a homeowner, landlord, renter, driver, pet owner, etc
  • Your earning potential considering that future income can be a target for liability claims

What Type of Excess Liabilities Does Umbrella Insurance Cover?

Umbrella insurance supplements your primary liability coverages, such as:

  • Malpractice insurance
    Useful for professionals like lawyers and doctors, an umbrella policy can cover a third-party claim amount above your malpractice insurance liability limit. When choosing your excess liability deductible, consider your malpractice policy limit to avoid a significant coverage gap for which you’d pay out of pocket if there’s a lawsuit against you.
  • Water damage
    Although umbrella insurance doesn’t cover floods, it might reduce certain water damage liabilities. It certainly can supplement your rental insurance liability. So if you forgot to turn off your bathtub and overflowing water-damaged expensive furniture belonging to a fellow tenant downstairs, your excess liability protection might come into play.
  • Liability lawsuits
    Compensatory damages against you (or an out-of-court settlement) can sometimes exceed your primary liability policy limits. Umbrella insurance is one of the most cost-effective ways to cover any extra bodily injury or property damage liability.
  • Landlords insurance
    If you own rental property, it’s a good idea to carry an umbrella insurance policy. It can protect you against excess liability claims from guests injured on your property, such as in fall accidents due to defective stairways, pool accidents, and more.
  • Professional liability insurance
    Do you work in a sector like psychology, financial planning, or investment consultancy? You may carry professional liability insurance to cover “bad advice” lawsuits by clients. Umbrella insurance will supplement this primary coverage if you face excess errors and omission liability claims.

Get The Right Protection for Your Assets with Umbrella Insurance!

An umbrella insurance policy can be useful for expanding your primary liability coverage to protect your assets fully. If you need expert assistance auditing your risks and assets, contact us at Remland Insurance today. We are happy to help you find the right coverage amount for your liability risks.

Contact Us


    The COVID 19 virus has certainly changed our lives for the short term both at home and at work. Our office is working in compliance with state and local officials and their request to minimize contact with others for the short term so that we can shorten the life of this virus.
    As such, our offices will be available by phone or by e mail 8-5 Monday thru Friday. If you need to make an appointment to come by, please call us before you drop by, so we can reduce risk, and take care of our staff and just be safe.
    Please don’t hesitate to call us and if for some reason you can’t reach us, please look at our website for carrier contact information. Thank You for your continued business.

    Contact us Call Us