Do I Need An Umbrella Policy?

Jun 15, 2022 | Car Insurance

Insurance companies spend a lot of money building their brand and trying to convince consumers to insure their homes and autos with them. But one of their most valuable products is also one they rarely talk about in their commercials: umbrella insurance.

No, that’s not a joke about protecting all the umbrellas you might have lying around. An umbrella policy is a way of getting substantial liability coverage — as much as a million dollars or more — over and above the policy limits on your existing coverage, without spending a lot more money. In fact, it’s so inexpensive that more people should look into it, rather than assuming that only the wealthy can afford it.

Of course, most drivers are determined to spend as little as possible on auto insurance. That’s understandable, but as we’ve discussed in previous posts, sticking to the bare minimum of liability coverage required by law can leave you badly uninsured. In Colorado, the minimum required by law is $25,000 per person for bodily injury, with a maximum of $50,000 per incident, and another $15,000 in property damage. While that minimum should cover the expenses of a minor accident, it’s clearly inadequate for more serious situations, in which medical costs alone could exceed the policy limits —and leave you on the hook for the amount the insurance won’t pay.

But by spending a little more on premiums, you can get four times as much coverage: $100,000 per person for bodily injury, with a $300,00 limit per accident. Or you can spend a little more and get the maximum amount offered by your carrier — in most cases, $250,000 per person, $500,000 per accident. For less than a hundred dollars more per month, you’re now getting ten times as much coverage as the bare minimum.

No one likes to spend more on insurance than they absolutely have to, and some would say that the carrier’s maximum is enough to cover most situations. But consider what would happen if you were found liable in a serious accident that resulted in, say, $850,000 in medical costs and property damage; even after your insurance company paid out the $500,000 policy limit, you could be looking at a lawsuit that could cost you your retirement fund, the equity in your house, and more. An umbrella policy would give you an additional million dollars in coverage, protecting your most prized assets, and the best part: such coverage only costs an additional $150 to $300 a year, or around $15 to $25 a month.

Umbrella insurance, it turns out, is relatively cheap compared to many other products, partly because you typically must be carrying max-limit coverage in order to qualify for it. And it covers many situations at home and on the road that might otherwise be an economic catastrophe: an accident at a party you’re throwing or in your backyard swimming pool, a wreck caused by your teenage son, even a libel or invasion of privacy lawsuit. It covers not just you but other members of your household in injury and property damage claims.

Of course, as with any insurance, there are exceptions. Umbrella insurance won’t cover you for deliberate malicious acts, for example, and mishaps that occur in the course of conducting a business generally require a professional liability policy. Talk to your insurance agent about what’s the best for you, and ask yourself: Just how much is peace of mind worth to you?


For more than thirty years the attorneys at Franklin D. Azar & Associates have helped thousands of injured people obtain complete and timely compensation for their losses. Our proven track record and expertise have allowed us to grow into the largest personal-injury law firm in Colorado, with offices in Denver, Aurora, Thornton, Fort Collins, Greeley, Grand Junction, Colorado Springs, and Pueblo. If you’ve been injured in a bus, car, truck, or motorcycle accident, you may be entitled to compensation.  Please call the car accident attorneys at FDAzar day or night at 800-716-9032, or contact us here for a free consultation and no-obligation evaluation of your case.