Umbrella Insurance – Do I Need It?

You might think your home and auto insurance offer more than enough coverage, but if you’re wrong, one very bad day could wipe out your wealth. That’s what an umbrella policy is designed to prevent.

A purple umbrella against a yellow background.
(Image credit: Getty Images)

Umbrella liability insurance is a type of liability insurance available to individuals and companies protecting them against claims above and beyond the amount covered by their primary policies. If your liability coverage isn't enough to cover the damages of an accident or an incident on your property, a personal umbrella insurance policy kicks in when your other liability underlying limits have been reached. In other words, an umbrella policy can protect you when your automobile or homeowners liability insurance is not enough.

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Roxanne Alexander, CFP®, CAIA, AIF®, ADPA®
Senior Financial Adviser, Evensky & Katz/Foldes Financial Wealth Management

Roxanne Alexander is a senior financial adviser with Evensky & Katz/Foldes Financial handling client analysis on investments, insurance, annuities, college planning and developing investment policies. Prior to this, she was a senior vice president at Evensky & Katz working with both individual and institutional clients. She has a bachelor’s in accounting and business management from the University of the West Indies, she received an MBA at the University of Miami in finance and investments.