Extra Protection for
Life's Unexpected Moments

The short answer is that almost everyone with assets to protect should carry umbrella insurance. The longer answer involves evaluating your personal risk profile and the assets you could lose in a lawsuit.

If you own a home, have savings or investments, earn a professional salary, or have a retirement account, you have assets that a plaintiff's attorney can target in a lawsuit. In Delaware, Pennsylvania, New Jersey, Maryland, and Virginia, a court judgment can attach to your home equity, bank accounts, investment accounts, and even garnish future wages. An umbrella policy creates a shield between your personal assets and the financial consequences of a liability claim.

Certain life situations significantly increase your liability exposure and make umbrella insurance especially important. Teen drivers are among the highest-risk groups on the road, if your 16-year-old causes a serious accident, you could face a multi-million-dollar lawsuit. Homeowners with swimming pools face elevated drowning and injury liability, even when proper safety measures are in place. If you own rental properties, landlord liability claims from tenants or visitors can be substantial.

Dog owners face breed-specific liability risks, and a single dog bite claim can result in hundreds of thousands of dollars in medical bills and legal damages. If you frequently host guests or entertain at your home, your exposure to premises liability claims increases. Business owners, physicians, attorneys, and other high-income professionals are often considered higher-value targets for lawsuits, making umbrella coverage essential for protecting their earnings and assets.

Even if you do not consider yourself "wealthy," a serious accident can generate a judgment that exceeds your underlying policy limits and puts your family's financial stability at risk. An umbrella policy provides peace of mind knowing that a single event will not wipe out years of hard work and savings.

An umbrella policy sits on top of your existing auto and homeowners insurance policies, which serve as the "underlying" coverage. Before an umbrella policy pays, the liability limits of the underlying policy must first be exhausted. This layered approach means the umbrella carrier requires you to maintain minimum liability limits on your auto and homeowners policies.

Typical underlying requirements for a $1 million umbrella policy include auto liability of at least 250/500/100 (or $300,000 combined single limit) and homeowners liability of at least $300,000. If you own rental properties, watercraft, or recreational vehicles, those policies may also need to meet minimum liability thresholds. Our appointed carriers each have their own underlying requirements, and we help you structure your coverage to meet these thresholds.

Here is a real-world example of how umbrella coverage works: You cause a car accident in Delaware that injures three people. Medical bills and lost wages total $850,000, and a lawsuit results in a $750,000 judgment against you. Your auto policy has $300,000 in bodily injury liability coverage. Without an umbrella, you are personally responsible for $450,000. With a $1 million umbrella policy, the umbrella pays the $450,000 that exceeds your auto coverage, and you pay nothing out of pocket beyond your regular premiums.

The cost of umbrella insurance is remarkably affordable relative to the protection it provides. A $1 million personal umbrella policy typically costs $200 to $400 per year for a family with clean driving records and no unusual risk factors. Each additional $1 million in coverage usually costs $100 to $200 more. For families in Delaware, Pennsylvania, New Jersey, Maryland, and Virginia, this represents one of the best values in personal insurance, substantial financial protection for roughly $1 per day.

Umbrella insurance is a cornerstone of personal asset protection planning. While other strategies, such as trusts, retirement account exemptions, and homestead protections, play important roles, an umbrella policy provides the most straightforward and cost-effective layer of defense against liability claims that could threaten your financial security.

In Delaware, homestead protections are limited, meaning your home equity is largely exposed to creditor claims. Pennsylvania offers no homestead exemption, making home equity fully vulnerable to judgments. New Jersey provides limited homestead protection, and Maryland has no homestead exemption for civil judgments. This means that in all five Mid-Atlantic states we serve, your home equity, potentially the largest asset your family owns, is at risk without adequate liability coverage.

Retirement accounts enjoy strong federal and state protections from creditors, but your non-retirement savings, investment accounts, real estate equity, and future earnings do not. A $2 million umbrella policy can protect all of these assets for approximately $400 to $600 per year, far less than the cost of a single legal defense, even if you ultimately win the case.

We work with our appointed carriers to structure umbrella coverage that aligns with your total asset picture. The general recommendation is to carry umbrella coverage at least equal to your total net worth, including home equity, savings, investments, and the present value of your future earnings.