Personal Finance Essentials
How to Obtain an Umbrella Policy
Because umbrella policies offer significant coverage at a low cost to the policyholder, carriers are careful about who they accept.
Most insurance companies will sell you an umbrella policy only if you also purchase your homeowners and auto coverage from them. This is a standard practice, not an exception, and it’s worth understanding before you shop.
A few carriers will offer a standalone umbrella policy to people who carry their primary coverage elsewhere – but they typically require that you maintain minimum coverage levels on those primary policies as a condition of the umbrella. The specific minimums vary by carrier.
The best place to start is with the agent who sold you your homeowners policy. They can tell you whether your current carrier offers umbrella coverage, what the bundling requirements are and what steps you’ll need to take to qualify. If your current carrier doesn’t offer umbrella coverage or the terms don’t work for your situation, an independent broker – one who represents multiple carriers – can shop the market on your behalf and find a policy that fits.
One final point: don’t wait until your circumstances are already complicated. Get your umbrella policy in place before your household includes teenage drivers, before you acquire significant assets and before you’ve had claims on your primary policies. The earlier you act, the easier it is to qualify – and the lower your premium is likely to be.