Most people feel confident in their home or auto insurance coverage—until something unexpected happens. Whether it’s a serious injury on your property, a lawsuit from a car accident, or a liability claim that exceeds your coverage limits, you might suddenly realize that your existing insurance stops short of full protection.
That’s where umbrella insurance comes in. It provides an extra layer of liability protection that can help you avoid financial disaster when your standard policies fall short. In this blog, we’ll break down what umbrella insurance is, why you might need it, and how to determine if it’s a smart choice for your family or business.
What Is Umbrella Insurance?
Umbrella insurance is supplemental liability insurance that extends beyond the coverage limits of your home, auto, or renters insurance. It’s designed to protect your assets if you are found legally responsible for damages or injuries that exceed your primary policy limits.
For example:
- If your homeowner’s policy covers $300,000 in liability and you’re sued for $750,000, your umbrella policy could pay the remaining $450,000.
- If your teenager causes a major car accident and your auto policy maxes out, an umbrella policy steps in to cover additional costs, including legal fees.
According to NerdWallet, umbrella insurance typically starts at $1 million in coverage and can go much higher. Best of all, it’s usually affordable—with policies starting around $150–$300 per year for $1 million in protection.
🔗 Learn more about umbrella coverage from Tom Needham Insurance:
Umbrella Insurance – Tom Needham Insurance
Why Liability Risk Is Higher Than Ever
You don’t have to be wealthy to need umbrella coverage. If you own property, drive a vehicle, manage a business, or have savings, retirement accounts, or even future earnings, you’re potentially at risk for lawsuits or legal claims that exceed basic coverage.
Common Risk Scenarios:
- A guest is seriously injured on your property and sues for medical bills and lost wages.
- Your child posts something defamatory online and the subject sues for reputational damage.
- You’re found liable for a multi-vehicle accident with injuries and multiple claims.
- Your dog bites a neighbor and the medical and legal costs exceed your homeowner’s policy.
Legal settlements and medical costs are on the rise. In fact:
- According to Trusted Choice, 13% of personal injury liability claims exceed $1 million.
- Safeco Insurance reports that umbrella insurance claims and payouts have nearly doubled in the last decade.
- The average cost of a liability lawsuit in the U.S. now ranges between $54,000 to over $200,000, depending on severity. (Insurance Information Institute)
These trends show that even a modest claim can overwhelm your standard coverage—and that an umbrella policy can be the difference between manageable damage and financial ruin.
What Does Umbrella Insurance Cover?
An umbrella policy is designed to cover what your base policies can’t. That includes:
✅ Covered:
- Bodily injury liability (e.g., accidents on your property)
- Property damage liability (e.g., damage you cause to others’ property)
- Legal defense costs (even if you’re not found liable)
- Certain personal liability claims like libel, slander, or invasion of privacy
- Worldwide coverage for incidents outside the U.S.
🚫 Not Covered:
- Your own injuries or property damage
- Business-related liabilities (unless you have commercial umbrella coverage)
- Intentional or criminal acts
- Contractual liabilities
Umbrella insurance can also apply to other members of your household, such as your spouse or children, depending on the policy structure.
Want to know how umbrella insurance compares to other options?
🔗 Understanding Umbrella vs. Excess Liability – Tom Needham Insurance
Who Should Consider Umbrella Insurance?
If you answer “yes” to any of the following, umbrella insurance may be a smart investment:
- Do you own a home, condo, or rental property?
- Do you have significant savings, investments, or retirement funds?
- Do you drive frequently or have teenage drivers?
- Do you host guests or events at your property?
- Do you own a pool, trampoline, or other liability risks?
- Do you want protection from lawsuits involving defamation, slander, or libel?
- Are you concerned about protecting your future income and assets?
Even if you don’t think you’re “wealthy,” umbrella insurance is about protecting everything you’ve built and plan to build—from your home equity to your retirement.
How Much Coverage Do I Need?
Umbrella insurance policies start at $1 million in coverage, but many homeowners opt for $2 million to $5 million, depending on their assets and risk profile.
General Rule of Thumb:
Your umbrella coverage should be at least equal to your total net worth, including:
- Home equity
- Savings and checking accounts
- Retirement and investment accounts
- Business assets (if applicable)
- Future income potential (especially if you’re sued)
Want help estimating your ideal coverage?
🔗 Contact Tom Needham Insurance for a Personalized Quote
Why Choose Tom Needham Insurance for Umbrella Coverage?
Tom Needham Insurance, based in Greensboro, NC, offers independent and personalized insurance services for homeowners, renters, drivers, and business owners. They help clients assess liability risks and structure umbrella policies that layer over existing home or auto insurance.
As an independent agency, they represent multiple insurance carriers, which means:
- More competitive pricing
- Options tailored to your needs
- Professional guidance to avoid underinsurance or overpaying
Plus, their team understands local risks in North Carolina and the surrounding regions—whether it’s for personal policies or bundled coverage.
Learn more about their offerings here:
🔗 Homeowners Umbrella Insurance – Tom Needham Insurance
🔗 General Liability for Businesses – Tom Needham Insurance
Final Thoughts: Peace of Mind, Priceless Protection
Umbrella insurance isn’t just for the wealthy—it’s for anyone who wants peace of mind. As legal costs, injury claims, and social liability risks increase, even modest households face the possibility of six- or seven-figure lawsuits.
For a relatively low premium, an umbrella policy can:
- Protect your home, savings, and future
- Cover defense costs, settlements, and judgments
- Offer security against unpredictable accidents or claims
If you’re ready to add that extra layer of protection, or just want help reviewing your current policies, reach out to Tom Needham Insurance today.
🔗 Schedule a Consultation
📞 Call: (336) 855-1223
Disclaimer: This blog is for informational purposes only and does not replace professional insurance advice. Always consult with a licensed agent or insurance professional before making coverage decisions.
Learn more about Tom Needham Insurance Agency in Greensboro, NC.