A personal umbrella policy adds liability coverage above your home and auto policy limits. It is one of the most cost-effective insurance products available, and most Georgia families with assets worth protecting should have one.
How umbrella insurance works
Your homeowners policy carries liability coverage, typically $100,000 to $300,000. Your auto policy carries liability coverage, typically $100,000 per person and $300,000 per accident at most. If you cause a serious auto accident with multiple injuries, or if someone is severely hurt on your property, those limits can be exhausted quickly. The plaintiff can then pursue your personal assets for the remainder.
A personal umbrella policy attaches above your underlying home and auto limits and provides an additional $1 million, $2 million, or more in coverage. For a family with $1 million in home equity, retirement savings, and other assets, a $1 million umbrella policy at $200 per year is difficult to argue against.
What umbrella insurance covers beyond home and auto
Umbrella policies also cover liability situations that your home and auto policies exclude entirely. Personal injury claims including libel and slander are covered. Rental property liability, if you own a rental property, is often included. False arrest and malicious prosecution claims are covered. Umbrella policies typically provide worldwide coverage, not just Georgia-specific protection.
What umbrella insurance does not cover
Personal umbrella policies specifically exclude business activities. If you cause a client injury or property damage during business operations, that is a commercial liability claim not covered by personal umbrella. They also exclude intentional acts, professional liability, and claims arising from aircraft ownership. For business owners, a commercial umbrella above your business owners policy and GL is the commercial equivalent.
Underlying limit requirements
Umbrella carriers require minimum underlying limits before their coverage attaches. Most require at least $300,000 in homeowners liability and $250,000 per person or $500,000 per accident in auto liability. If your current limits are below these thresholds, you need to increase them as a prerequisite to the umbrella. The cost of increasing underlying limits is usually modest and worth it to access umbrella pricing.
What umbrella insurance costs in Georgia
For most Georgia families, a $1 million personal umbrella policy costs $150 to $300 per year. A $2 million umbrella typically adds another $75 to $100. Factors that increase cost include teen drivers in the household, a swimming pool, a trampoline, a dog with a history of biting, or rental properties. For families with these risk factors, $250 to $400 per year for $2 million of coverage is still a strong value relative to the protection it provides.