What does umbrella insurance cover?

It covers large liability claims — bodily injury to others, property damage, and legal defense — after an underlying policy's limit is exhausted. It also covers some claims base policies skip, like libel, slander, and false arrest. It does not cover your own property, intentional acts, or (on a personal umbrella) business liabilities.

How much is a $1,000,000 umbrella insurance policy?

Typically a few hundred dollars a year for a personal umbrella, because it only pays after your auto or homeowners limits are exhausted. Each additional million usually costs less than the first. Commercial umbrella pricing varies with the underlying business risk.

Is umbrella insurance worth it?

If your assets exceed your base liability limits, yes — a single serious at-fault accident or injury lawsuit can produce a judgment far beyond a $300,000 auto limit, and without an umbrella the difference comes from your savings, investments, and future wages. The common rule of thumb is to carry umbrella coverage at least equal to your net worth.

What does umbrella insurance not cover?

Your own injuries or property, intentional or criminal acts, contractual liabilities, and claims excluded by the underlying policies. A personal umbrella also excludes business-related claims — a business needs its own commercial umbrella over its general liability and auto policies.

What is a schedule of underlying insurance?

It's the list on the umbrella's declarations page of the policies the umbrella sits above — each with its carrier and required limits. The umbrella requires you to maintain those underlying policies; if one lapses or its limit drops below the scheduled amount, you're personally responsible for the gap before the umbrella pays.

How long should I keep umbrella policies?

Permanently, and together with the underlying policies from the same period. Liability claims can be filed years after an incident, and an umbrella claim always involves proving how that year's layers stacked — the underlying policy's limit, its exhaustion, and the umbrella above it.

Insurance

Umbrella Insurance Policy

Umbrella insurance is extra liability coverage that pays after the limits of an underlying policy — auto, homeowners, general liability, or employers liability — are exhausted. The declarations page lists the umbrella limit, the self-insured retention, and a schedule of the underlying policies it sits above.

A $1 million umbrella policy typically costs a few hundred dollars a year, with each additional million costing less than the first.

Source: Progressive: Umbrella Insurance

Written & maintained by the Granite team · Last updated August 2026

Overview

An umbrella policy is a second layer of protection: when a serious claim blows past the liability limit on your auto, home, or business policy, the umbrella pays the excess, typically in $1 million increments. Personal umbrellas sit over auto and homeowners policies; commercial umbrellas sit over general liability, commercial auto, and employers liability.

The document's defining feature is the schedule of underlying insurance — the list of policies (with carriers and limits) the umbrella requires you to maintain. Let an underlying policy lapse or drop below the required limit and you become responsible for the gap. The self-insured retention is what you pay when the umbrella responds to a claim no underlying policy covers.

When you’ll get your Umbrella Insurance Policy

Your assets outgrew the liability limits on your auto or homeowners policy
A client contract requires liability limits higher than your base policies provide
You renewed the umbrella alongside its underlying policies
You added a risk that raises lawsuit exposure — rental property, a pool, a teen driver
Your business stacked an umbrella over its general liability and auto policies

What’s on your Umbrella Insurance Policy

These are the fields Granite reads and extracts automatically the moment you upload one.

Named Insured: The person or business the policy covers.
Carrier & Policy Number: The insurer and the unique policy identifier.
Occurrence Limit: The umbrella's limit per occurrence, above the underlying policies.
Aggregate Limit: The most the umbrella pays in total over the policy term.
Self-Insured Retention: What you pay before the umbrella responds to a claim no underlying policy covers.
Schedule of Underlying Insurance: The required underlying policies, each with its carrier and limits.
Policy Term: The effective and expiration dates of coverage.

How long to keep it

Keep every umbrella policy permanently, together with the underlying policies from the same period.

An umbrella only pays after an underlying policy's limit is exhausted, so any late-surfacing liability claim involves both documents from the year of the incident. Because liability suits can be filed years after the fact, the umbrella and its scheduled underlying policies from that period need to survive together — one without the other can't prove how the layers stacked.

How Granite handles your Umbrella Insurance Policy

Granite reads your umbrella declarations (carrier, policy number, occurrence and aggregate limits, self-insured retention, and the schedule of underlying insurance) and files it alongside the underlying policies it sits above. Every policy year stays searchable as a set, so when a claim reaches into a prior period you can pull the umbrella and its underlying policies together, and Granite reminds you before the term lapses.

FAQ

Umbrella Insurance Policy: common questions

What does umbrella insurance cover?: It covers large liability claims — bodily injury to others, property damage, and legal defense — after an underlying policy's limit is exhausted. It also covers some claims base policies skip, like libel, slander, and false arrest. It does not cover your own property, intentional acts, or (on a personal umbrella) business liabilities.
How much is a $1,000,000 umbrella insurance policy?: Typically a few hundred dollars a year for a personal umbrella, because it only pays after your auto or homeowners limits are exhausted. Each additional million usually costs less than the first. Commercial umbrella pricing varies with the underlying business risk.
Is umbrella insurance worth it?: If your assets exceed your base liability limits, yes — a single serious at-fault accident or injury lawsuit can produce a judgment far beyond a $300,000 auto limit, and without an umbrella the difference comes from your savings, investments, and future wages. The common rule of thumb is to carry umbrella coverage at least equal to your net worth.
What does umbrella insurance not cover?: Your own injuries or property, intentional or criminal acts, contractual liabilities, and claims excluded by the underlying policies. A personal umbrella also excludes business-related claims — a business needs its own commercial umbrella over its general liability and auto policies.
What is a schedule of underlying insurance?: It's the list on the umbrella's declarations page of the policies the umbrella sits above — each with its carrier and required limits. The umbrella requires you to maintain those underlying policies; if one lapses or its limit drops below the scheduled amount, you're personally responsible for the gap before the umbrella pays.
How long should I keep umbrella policies?: Permanently, and together with the underlying policies from the same period. Liability claims can be filed years after an incident, and an umbrella claim always involves proving how that year's layers stacked — the underlying policy's limit, its exhaustion, and the umbrella above it.

Sources

This page is checked against primary and authoritative sources:

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