Decades before our client’s estate and his widow were named in a lawsuit, we approached the couple about purchasing an umbrella policy to protect their assets in the event of a lawsuit. Fortunately, they purchased the protection.

Many years later, it provided peace of mind to his surviving spouse, who was in her mid-late 80s when the suit was filed.

How Umbrella Coverage Made a Difference

Three years prior to the lawsuit, our clients gave their adult son permission to borrow their car. Their son was in a two-car collision while driving their car and both parties sustained moderate injuries. Three years after the accident and just before the statute of limitations expired, the plaintiff filed a lawsuit against my client’s estate, his widow, and their adult son, claiming her injuries in the accident irreversibly diminished her quality of life. The plaintiff suffered a broken ankle and a broken wrist as a result of the accident. She appeared to have made a full recovery, but was claiming that the injuries were still impacting her ability to fully engage in her work and her activities with her grandchildren, family, and colleagues.

Just weeks before the lawsuit was filed, our client’s widow sold a prime piece of lakefront property she and her late husband had owned for 40 years. Proceeds from the sale of the home would ensure she was financially secure. And then along came the lawsuit.

Unable to negotiate a settlement, it went to trial. Fortunately, the plaintiff was not awarded an amount that exceeded their automobile policy’s liability. However, throughout the nine-month period the lawsuit played out, the umbrella policy provided peace of mind to our client. Without the additional layer of protection the umbrella policy provided, her financial security may have been at risk if the judgment awarded the plaintiff exceeded the liability protection limits of their automobile policy.

Our reason for sharing this story is that when most of us think about advocating for an idea, we go to fact and figures or the rational side of the brain. Yet, this story makes the message more personal.

In today’s litigious environment the need for additional layers of liability protection is greater than ever. The above example is just one scenario in which having an umbrella policy can offer peace of mind, even if you never need to use it. Being named in a lawsuit is stressful in itself; however, an umbrella policy can eliminate the financial worry and stress of a pending lawsuit.

You don’t have to be wealthy to need an umbrella policy – even if you don’t have any assets, your wages can be garnished.

An umbrella policy picks up where your auto and homeowners insurance policies leave off. It has a high deductible because the deductible is designed to be met by your other policies.

Who Should Buy an Umbrella Policy?

Pool floaties on the water.    Although umbrella coverage is not a requirement, the following individuals often purchase it:

  • Property owners
  • People who own pets or recreational toys that can cause injury such as dogs, trampolines, pools, or motorized scooters and hoverboards.
  • Engage in activities that may expose you to a lawsuit such as serving on a board, or coaching kids’ sports
  • Participating in a sport that may injure others such as skiing or motor cross

In fact, our same client was sued for medical expenses when he lost control of the golf cart he was driving and injured another golfer. Luckily, the medical costs were within the liability limits of his homeowner’s policy. Nevertheless, he had the additional coverage of the umbrella policy if the medical costs exceeded those limits.

How an umbrella policy with an underlying auto policy pays out:

Imagine you have an auto policy with $250,000 of liability insurance. You also have $1 million of umbrella coverage.
On the way home from work, you accidentally run a red light and T-bone another car in the intersection. The driver, who is a medical professional, is injured and seeks damages of $700,000 because his injuries prevent him from working while his broken arm heals.

The court finds you liable for the full amount.

The maximum liability on your auto policy is $250,000. After that coverage has been depleted, your umbrella policy
steps in and pays the final $450,000.

If you had not been protected with the additional liability coverage, you personally would have been responsible for
$450,000 in claims against you.

Basically, umbrella applies when any activity for which you are found liable results in the payout of a claim that
exceeds the limits of an underlying (typically home or auto insurance) policy. Accidents, lawsuits, injuries while
traveling, and damages caused by teen drivers are just a few examples.

Umbrella Insurance is very affordable.

According to the Insurance Information Institute, an umbrella policy with $1 million in coverage costs about $150 to $300 per year. With its high coverage limit, umbrella insurance gives you good value for the cost. In our litigious society, the extra cost may be well worth the peace of mind you get knowing your assets are insulated from lawsuits.

Want to Explore Umbrella Coverage? We Can Help!

Thinking about an umbrella policy? Contact a Healy Insurance Risk Management Advisor today for your policy!

About the Authors

Connie Greenwood, Risk Management Advisor

Tim has almost 20 years of experience providing personal insurance providing individuals, couples, and families with home, auto, and umbrella insurance. His ultimate goal is to be is clients' trusted adviser and expert, so they have the peace of mind and protection they deserve.

Tim Pingel, Risk Management Advisor









Connie Greenwood has 35 years of experience as an Insurance Advisor. She enjoys helping her clients and prospects understand their insurance options, and crafting insurance solutions tailored to their unique needs. She finds great joy in being a trusted advisor for her clients, helping to protect their financial welfare against unforeseen accidents and circumstances and bringing them peace of mind.

Tim Pingel has almost 20 years of experience as a personal insurance adviser, providing individuals, couples, and families with home, auto, and umbrella insurance. His ultimate goal is to be his clients’ trusted adviser and expert, so they have the peace of mind and protection they deserve.