Why You Might Need an Umbrella Policy

By Grinley | August 22, 2025
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umbrella policy

Why You Need an Umbrella Policy Even If You Don’t Have a Lot of Assets

When people think about umbrella insurance, they often picture wealthy individuals with multiple homes, fancy cars, and sprawling estates. So if you don’t have a ton of assets, it’s easy to assume you don’t need that kind of coverage.

But here’s the truth: Umbrella insurance isn’t just about what you have—it’s about what someone else can take.

Let’s say you’re involved in a serious accident, someone gets hurt on your property, or your teenager causes a multi-car pile-up. If the damages exceed your standard auto or homeowners policy limits, you’re on the hook for the difference. And in today’s world, that difference can easily run into the hundreds of thousands—or even millions—of dollars.

Even if you don’t have those kinds of assets sitting in the bank, you could still be held personally liable. That means your future wages, savings, and financial security could all be at risk.

What Exactly Is an Umbrella Policy?

An umbrella policy provides an extra layer of liability protection above and beyond your existing insurance coverage. It kicks in when the limits on your auto, home, or renters insurance have been exhausted. Think of it as a financial safety net that catches you when a big claim threatens to turn your life upside down.

Real-Life Examples

  • Auto Accident: You’re found at fault in a crash that causes severe injuries. Your auto policy covers $250,000 in liability—but the total damages are $600,000. Your umbrella policy can cover that $350,000 gap.
  • Home Injury: A guest slips and falls on your icy front steps and sues for medical bills and lost wages totaling $750,000. Your homeowners policy covers $300,000. Without umbrella coverage, you’d be on the hook for the remaining $450,000.

At Boufford Insurance, we believe in planning for the “what ifs” so you can focus on living your life. If you’re not sure whether an umbrella policy makes sense for you, let’s talk. We’ll walk you through your current coverage, talk about your risks, and help you make a smart decision that fits your situation and your budget.