Personal Umbrella Insurance in Massachusetts: Who Needs It & Why?

At C&S Insurance, people often ask us if their personal assets are adequately protected by their home and auto policies, and the answer is often no. In particular, high-net worth individuals and families often don’t have high enough limits on these policies to shield themselves from potentially costly lawsuits.

An umbrella insurance policy, also known as personal umbrella insurance, is an optional insurance policy that adds an extra layer of financial protection beyond the limits of your personal liability coverage. In other words, it supplements the coverage you already have from your homeowners, auto, renters, or other insurance policies.

That’s why we recommend personal umbrella insurance to people who have significant assets, high-risk lifestyles, or risk-prone add-ons like pools and trampolines. In this blog, our Massachusetts insurance experts break down the details of what umbrella insurance covers, who needs it, and why.

How Umbrella Insurance Works

If you or someone in your family is held liable for damage that costs more than what your home insurance, car insurance, or other policies cover, your umbrella policy kicks in.

For example, if someone slips on your front porch, gets injured, and sues you for $500,000, but your homeowners insurance maxes out at $300,000 for personal liability, you’re on the hook for the remaining $200,000. An umbrella policy would cover this $200,000, meaning you’d only be responsible for paying the deductible.

Umbrella policies can be purchased with limits up to $1 million, $10 million, or even $100 million, depending on your specific needs. An insurance agent can help you purchase a policy that’s right for you, based on your lifestyle, net worth, and other factors.

An umbrella policy is different from excess liability coverage, which simply raises the limits on your existing policy, but has the same exclusions. For example, excess liability wouldn’t cover libel or slander, whereas an umbrella policy would. An umbrella policy can also cover incidents that take place abroad, which a standard policy with excess liability typically cannot. Umbrella insurance covers a broader scope of claims while also giving you higher coverage limits.

What Umbrella Insurance Covers

Personal umbrella policies cover a wide array of liability claims, from a guest getting injured on your property to a lawsuit accusing you of defamation. Here are some examples:

• Bodily injury of a guest in your home, including from dog bites, pools, or trampolines
• Property damage to someone else’s home for which you or your family is responsible
• Legal expenses incurred by causing bodily injury or property damage
• Legal expenses for defending yourself or a family member accused of slander, libel, or personal defamation
• Incidents that happen in different states or countries (depending on your policy details)

Generally speaking, the coverages provided by umbrella insurance protect not just you, but anyone listed on your policy, such as your spouse or children.

What Umbrella Insurance Does Not Cover

Your personal umbrella policy covers a lot, but it doesn’t cover everything. It won’t protect you from the costs associated with:

• Damage caused intentionally by you or your family
• Business- or occupation-related damages
• Damage to your own property or vehicle
• Injuries you sustain
• Written or oral contracts (such as with domestic employees)

Talk to an insurance agent to learn more about how an umbrella policy can help you and understand the breakdown of what will and won’t be covered.

Who Needs Massachusetts Umbrella Insurance & Why?

Not sure whether umbrella insurance is right for you? If you fall into one of the following categories, it’s likely a good idea to invest in an umbrella policy to protect yourself, your family, and your assets.

1. You Have a High Net Worth or Significant Assets

Why: Having a high net worth, a high-value home, or other significant assets can make you an easy target of lawsuits. Plus, it’s likely that the liability limit of your standard homeowners policy exceeds the value of your assets.

2. You Own a Rental Property

Why: Landlords can also easily become involved in costly lawsuits. An umbrella policy can give you extra coverage beyond what’s included in your standard landlord policy.

3. You Regularly Entertain Guests

Why: Hosting social gatherings can lead to serious liability claims. Guests may be especially likely to get injured on your property if they are drinking alcohol.

4. You Participate in Extreme Sports or Dangerous Hobbies

Why: Boating, skiing, racing motorcycles, or flying small aircraft not only put your own safety at risk; these activities can also cause injuries to other participants or spectators. If these hobbies are a part of your lifestyle, it’s a good idea to have an umbrella policy in case you incur liability claims.

5. You Are a Public Figure

Why: If you’re in the public eye, every move you make is scrutinized, including the words you say and write online. If you say the wrong thing, you could be sued for libel, slander, or defamation. Fortunately, umbrella insurance can cover the legal fees associated with these claims.

6. You Have a Trampoline or Swimming Pool

Why: Trampolines and swimming pools put guests — including children — at risk of seriously injuring themselves.

7. You Have a Dog or Other Large Animal

Why: Particularly, if your dog is a more aggressive breed, there is always a risk that a guest could get bitten, even if your pet is usually well-behaved.

High Net Worth Umbrella Insurance in Massachusetts

At C&S Insurance, we offer personal umbrella insurance for high net worth clients. High net worth umbrella insurance has the following benefits:

• Higher limits — up to $25 million for those who need it
• Multi-state programs — for those who regularly live and work in different parts of the country
• International auto coverage — automatic protection when you’re driving abroad

Get a quote from our high net worth insurance experts today.