Umbrella Insurance

In this article you’ll discover:

  • When umbrella insurance is a good idea
  • What umbrella insurance covers
  • How to obtain umbrella insurance

As you may suspect, personal umbrella insurance sits on top over your auto and homeowner insurance policies, protecting you. For example:

If you’re liable for the injury of an individual or damage to property and the judgment against you is more than you auto or homeowner’s policy limit, then personal umbrella insurance would kick in.

That’s why you want this extra protective liability limit.

When Umbrella Insurance is a Good Idea

Consider the following questions to help determine if umbrella coverage is right for you:

If you answered yes to any of these questions and have experienced additional exposure to risk via an increase in possessions or an overall boost in income, you might want to think about purchasing a personal umbrella policy.

While Canadians are not as litigious as our American friends, you can still get sued and have a liability judgment set against you.

Note:  If the combination of your insurance and assets isn’t enough to pay a liability judgment you incur, your assets can be liquidated with a court order. In fact, if you still owe money after the funds from your assets have been depleted, a percentage of you future earnings could be levied!


Umbrella Insurance Coverage

As suggested, umbrella payouts are triggered when the liability limits are exceeded on the underlying policies (homeowner, auto).

Here is some information on this coverage:

Also, there are no deductibles on personal umbrella policies.

Coverage Note 1: If you carry umbrella insurance in your home province, the policy will extend to cover the underlying policies no matter where you are. However, it will not apply for homes and cars purchased and registered in the United States if underlying liability limits aren’t consistent and adequate to meet the needs of your insurance carrier in Canada. Check with us to determine this and help find you worldwide coverage, if needed.

Coverage Note 2: Everything is not covered by an umbrella policy. For example, it will not cover any punitive damages assessed against you by the court. Punitive damages are awarded to an individual for what a judge and/or jury perceive to be an egregious wrong to have been perpetrated. They are assessed to deter and/or punish the person being sued.

How to Obtain an Umbrella Policy

Since umbrella coverages kicks on “on top” of your auto, homeowners and renters policy, many insurers who provide umbrella coverage will want the other policies also be written with them. That’s usually good because you can typically reduce insurance cost by taking advantage of the multi-policy discounts that are available when you buy several policies from the same insurer.

However, if this isn’t possible, we also represent companies that will write stand alone umbrella policies.

Also, you usually will be required to have a certain amount of liability coverage on the underlying policies before you’ll be able to purchase umbrella coverage.

If you have any concerns or questions about this coverage, contact an Alpine Insurance Expert in Alberta today. Call us at 1-877-770-8822 or fill out a quote form on the top of this page for a quick estimate on how much it will cost to increase your comfort level with personal umbrella insurance.

  • Let’s say that you were in a car accident in Calgary. You’re found responsible for the injury of a well paid CEO. He’s unable to work and decides to sue for loss of income. That’s measured at $5 million. However, your auto policy only has the compulsory minimum limit of $200,000. The judgment against you is $3 million.
  • One of your daughter’s friends is at your Red Deer home. He slips and falls while dancing in the living room. He hurts his hip and sues for more than the $500,000 limit on your homeowner’s policy. The judgment against you is set at $1.5 million.
    • Do you one a snowmobile, ATV or a boat?
    • Do you own two or more residences?
    • If so, is one of them a condominium?
    • Do you own a cottage or a rental property?
    • Do you own two or more automobiles?
    • Limits-You can usually purchase up to $5 million in limits. This will more than adequately protect you for just about any personal liability judgment you might receive.
    • Cost- You usually buy umbrella protection in $1 million increments.  The cost for this valuable coverage is surprisingly low. For example, you can often buy a $1 million limit personal umbrella policy for $150 to $250 per year. If you want additional protection, it’s often even less than that per million.
    • Coverage– Umbrella coverage can be used for either your auto or homeowners or renters policy.  You can also cover your “toys” such as personal watercraft or a motorcycle.

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