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Stay Dry With Umbrella Insurance: Because When It Rains, It Pours

Feb 10, 2024 10:15:00 AM

In this litigious world, protecting yourself and your assets from liability is both important and increasingly difficult. While insurance policies such as auto, homeowners, and renters insurance have liability protection to financially protect you in a lawsuit, there are situations where they may not be enough. This is where umbrella insurance comes into play, offering an additional layer of protection beyond the limits of your standard insurance policies. 

What is Umbrella Insurance?

Umbrella insurance is not in fact a specialized type of insurance for luxury umbrellas but rather, a type of liability insurance that goes over and beyond the limits of your other insurance policies. It serves as a safety net, offering protection against claims and lawsuits that exceed the limits of your primary insurance coverage. Essentially, it kicks in when your other policies have reached their maximum payout, providing you with additional financial protection.

At Armour Insurance, we recommend the current maximum of  $2 million in liability coverage on all of your policies. Whether it be your home, your vehicle, your motorcycle, or anything in between. Umbrella insurance would cover the liability cost over the $2 million on your policy. An umbrella policy can add up to $5 million in extra liability coverage, bringing your total liability coverage to $7 million. 


Why Do You Need Umbrella Insurance?

Umbrella insurance isn't a new product, but in recent years it has been gaining traction. Since 2018, Alberta has seen a heavy increase in the number of personal injury lawsuits that result in damages over $1 million. This trend has continued to grow over the previous years and personal injury claims have exceeded $2 million in damages. When the coverage limit of $2 million is reached on a liability claim, you can be held personally liable for all additional damages. 

How Could Someone be Personally Sued for More than $2 million?

This is a question that we get on occasion and the answer is not a pleasant one. Lawsuits of this magnitude are often the result of a lost future income. This can be through disability or loss of life. If someone is rendered unable to work in a situation where you are found to be liable, you could be sued for that person's potential future earnings. The same applies in the case of loss of life. 


Here is a hypothetical situation that may help clarify how these lawsuits come about. 

If you were to be in a car accident where you were found to be liable for the damages, and you were to injure a prestigious surgeon they could sue for lost future income. If the surgeon suffered permanent damage to one or both of their hands that rendered them unable to perform surgery, you could be sued for every year of potential earnings that were lost. If that surgeon was making $350,000 annually and had 10 working years left in their career, the damages from lost income alone would be $3.5 million. This doesn't account for any other damages that could result from the accident. If you were to be sued for $4 million by the surgeon, your liability coverage on your vehicle would cover the first $2 million and you would be personally responsible for $2 million. 

Having a $5 million umbrella insurance policy would prevent you from being burdened with a $2 million debt for the remainder of your life.

Can Anyone Get Umbrella Insurance? 

For the most part, yes. Some companies have exceptions to their policies but most people can purchase an umbrella policy for their needs. If you're looking to purchase umbrella insurance, contact your agent or broker to get a quote. 

*Note, you should already have maxed out liability coverage on your auto/property policy before purchasing umbrella insurance. 

Should I Get an Umbrella Insurance Policy?

There are many situations where an umbrella insurance policy could be beneficial, but here are a few examples that might be most beneficial.

  • If you have multiple assets (multiple properties and/or multiple vehicles)
  • People who travel frequently
  • People who regularly carpool
  • Community volunteers
  • Business owners

Umbrella Insurance for High Net Worth Individuals


Umbrella insurance offers an additional layer of liability protection, filling in the gaps left by standard insurance policies. Whether you're a homeowner, business owner, or high-net-worth individual, investing in umbrella insurance can provide invaluable peace of mind and financial security. By understanding the benefits and coverage options available, you can ensure that you're adequately protected against life's uncertainties.

When considering umbrella insurance, it's essential to assess your individual needs and consult with an insurance professional to determine the appropriate coverage limits and policy options for your specific situation. Looking to get an umbrella policy? Talk to an Armour broker today to get started. 

Call us 1-855-475-0959

Jake McCoy

Written by Jake McCoy


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