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What is an Umbrella Policy?

February 3, 2020

If you’ve heard the term “umbrella policy” you might be curious about what exactly it is and what it covers. Umbrella insurance, also known as excess liability insurance, is insurance that covers claims that go beyond regular homeowners, auto, or watercraft policy coverage. This policy doesn’t just only cover the policyholder, but also their family or household. The good news is that this is relatively inexpensive insurance that can save you a lot of money in the event of a liability claim.

umbrella policy

How Does an Umbrella Policy Work?

If a policyholder or a member of their family is sued for damages that are more than the liability limits of their car insurance, homeowners insurance, or another coverage type, an umbrella policy helps pay the difference. Even though policies vary depending on the provider, many insurance providers require a base insurance coverage of $150,000 to $250,000 for auto insurance and $250,000 to 300,000 for homeowners insurance in order for a policyholder to add an umbrella insurance policy.

Who Can Benefit From an Umbrella Insurance Policy?

Many people can benefit from supplemental insurance, however, people who own expensive property, have significant savings, or own potentially dangerous items that can cause injury are encouraged to add this insurance coverage. Some other types of people who may need an umbrella insurance policy are:

  • Landlords
  • People who volunteer
  • Sports participants
  • Frequent party hosts
  • Families with a teenage driver
  • Dog owners

As the name suggests, this policy covers a wide range of incidents. If any of those things pertain to you or if you participate in activities that may leave you liable, an umbrella policy will benefit you.

How Much Does an Umbrella Policy Cost?

How much you end up paying for an umbrella policy varies depending on the provider and additional factors. You don’t have to purchase an umbrella policy from the same provider as your auto or homeowner insurance, but it may help you save money by doing so. Because you are required to have a certain amount of auto and homeowner insurance coverage, umbrella policies are cheaper coverage add-ons. For a $1 million policy, you can expect to pay about $150 to $300 a year.

Ready to Add an Umbrella Policy to Your Coverage?

If you’re looking for an umbrella policy in MD, American Heritage Insurance has you covered. We can help you find the best umbrella policy option for you and your family. With over 35 years of experience, we help our clients create custom-tailored insurance solutions that will benefit themselves, their business, and their families for years to come. Contact us today to talk to one of our experienced agents!

What Our Clients Say...

Over and above the time, effort and saved dollars that you put into earning our business – your careful attention to detail in getting our coverage right is what mattered the most. Thank you for educating me about the differences in coverage and for reallocating our insurance dollars to minimize our exposure while maximizing our policies.

- Eric L, President of Jeffrey Press, Inc.

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Frederick County: Frederick (21701, 20702, 21703, 21709), New Market (21774) , Mount Airy (21771), Urbana (21704), Ijamsville (21754), Walkersville (21793), Libertytown (21762), Damascus (20872), and more.

Howard County: Clarksville (21029), Columbia (21044), Cooksville (21723), Dorsey (21075), Elkridge (21075), Ellicott City (21043), Fulton (20759), Glenelg (21737), Glenwood (21738), Granite (21163), Hanover (21076), Highland (20777), Jessup (20794), Lisbon (21765), Marriottsville (21104), North Laurel (20723), West Friendship (21794), Woodbine (21797), Woodstock (21163), and more.

Montgomery County: Olney (20832), Damascus (20872), Laytonsville (20882), Silver Spring (20910), Clarksburg (20871), Gaithersburg (20878), Germantown (20876), Bethesda (20816), Chevy Chase (20815), and more.

Baltimore County: Arbutus (21227), Catonsville (21228, 21250), Cockeysville (21030, 21031, 21065), Dundalk (21222), Edgemere (21219), Essex (21221), Garrison (21055), Lansdowne (21227), Lochearn (21207), Lutherville (21093), Middle River (21220), Milford Mill (21244), Overlea (21236), Owings Mills (21117), Parkville (21234), Park Heights (21215), Pikesville (21208), Randallstown (21133), Reisterstown (21136), Rosedale (21237), Timonium (21093), Towson (21204), White Marsh (21162), Woodlawn (21207), and more.

Carroll County: Eldersburg (21784), Finksburg (21048), Hampstead (21074), Manchester (21102), Marriottsville (21104), Taneytown (21787), Union Bridge (21791), Westminster (21157, 21158), Mount Airy (21771), New Windsor (21776), Sykesville (21784), Woodbine (21797), Taneytown (21787), and more.

We also serve the rest of Maryland and the United States.