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Umbrella Insurance

An Overview of Umbrella Insurance

Sometimes insurance coverage isn’t sufficient to pay all costs. You might find yourself in a “gap”, which is the area that remains when insurance stops paying. You could have Medicare and a supplemental insurance policy, the gap is what remains if there are still expenses once Medicare and the supplemental insurance have paid their part. This is where umbrella insurance is useful.


Umbrella policies are intended to keep the policyholder from paying excess out of pocket costs. These policies are usually tied to home and auto policies. Any costs not covered by these other policies should be covered under the umbrella policy.

Umbrella Insurance Users

Umbrella policies are for people who feel they can benefit from extra protection. It’s also for people whose existing policies do not provide all the coverage they need. People covered by these policies include anyone listed on the policy, and that can include the policyholder, their spouse, and other dependents.

How does it Work?

As stated earlier, umbrella policies fill in the gaps left by other insurance plans. The insured pays monthly or semi-annual premiums to keep the policy active. When something occurs to trigger the use of another insurance policy, the umbrella policy looks to see if anything is not covered. A lump sum of cash may be paid after the costs are incurred. The policyholder can also opt to have the insurance company pay the services directly.

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