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Texas Department of Insurance
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Umbrella policy: What is it and when do you need one?


Sometimes extra or "umbrella" insurance coverage makes financial sense.

  1. What is an umbrella policy?

    Umbrella policies can protect your assets by paying large medical and repair bills that a court or your insurance company says you’re responsible for paying.

    Most insurance policies – like home and auto – only pay up to a certain amount for liability coverage. Umbrella policy coverage usually starts around $300,000 and pays up to at least $1 million.

    Umbrella policies also offer more liability coverage than your home or auto insurance. It might cover for false arrest, defamation, and slander.

  2. When does an umbrella policy pay?

    An umbrella policy might pay for:

    • Medical bills.
    • Property damage.
    • Certain lawsuits.
    • Uninsured or underinsured auto claims.

    If you’re in a car accident or someone is hurt in your home and you’re sued for medical bills, for example, your umbrella policy would kick in after your auto or home insurance stops paying. Umbrella policies cover everyone in your household.

  3. What types of claims would fall under umbrella policies?

    Any number of situations could fall under an umbrella policy.

    Some examples:

    • You cause a serious car accident or an accident with multiple cars.
    • Your dog bites someone.
    • A child is hurt in your yard, pool, or trampoline.
    • Someone falls in your home and is hurt.
  4. How do I get an umbrella policy?

    Ask your agent or insurance company. They can get you a quote for a policy.



Questions? Call us at 800-252-3439.

Last updated: 4/2/2024