Umbrella Policies

In March 2024 a Florida jury awarded $7.4 million to four people injured when a 19‑year‑old driver hydroplaned and crossed the center line.[1] The young man carried a $250,000 auto‑liability limit; his parents’ savings, home equity, and future wages suddenly sat in the crosshairs. Verdicts above one million dollars are no longer rare; jury awards of that size have climbed roughly 35 percent since 2019.[2]

Why umbrella coverage matters right now

Medical inflation lifts hospital charges each year, and courts add “social inflation” multipliers for emotional distress. A standard home or auto policy usually tops out at $300,000 or $500,000 of liability—solid numbers in the 1990s, but today a single ICU night for multiple patients can eclipse them. Umbrella insurance adds an extra layer—often $1 million to $5 million—only after your underlying policy pays out. For most families the premium runs $200–$400 per million.[3] That’s less than a daily coffee for protection that can preserve years of faithful saving.

What exactly is an umbrella policy?

Picture your home and auto policies as sturdy walls around your finances. An umbrella is the roof that spans those walls, preventing a catastrophic claim from soaking everything beneath. It steps in when a liability claim exceeds your base limits and covers both legal defense and judgments up to the umbrella amount. Carriers require you to maintain certain minimums—often $300,000 on homeowners and $250,000 / $500,000 on auto bodily injury—so the layers align properly.

Who faces the greatest risk?

Liability surprises rarely announce themselves. I see five everyday profiles where exposure rises faster than most people realize:

  • Every driver on the road. Auto collisions remain the single largest source of umbrella claims; one in eight payouts now exceeds $500,000.[4]
  • Parents of teen drivers. Sixteen‑to‑nineteen‑year‑olds crash three times more often than older drivers; severe‑injury settlements involving teens average $1.6 million.[5]
  • Real‑estate owners. A slippery porch step or a short‑term renter’s party can trigger litigation far beyond home‑policy limits.
  • Pet owners. Dog‑bite claims averaged $58,000 last year and sometimes push into six figures.[6]
  • Household employers. If a nanny or handyman is hurt on your property, workers‑comp exemptions fade quickly and personal liability rises.

None of these scenarios requires great wealth—only normal life. Proverbs reminds us, “The prudent see danger and take refuge” (22:3). Umbrella insurance offers that refuge while leaving room to keep giving, saving, and living generously.

How much coverage is enough?

Many advisers say “match your net worth,” but I prefer a purpose‑driven question: What resources has God asked you to steward, and how far into the future should they be protected? For most households $1-2 million feels right; real‑estate investors or higher earners often choose $5 million. Because the second million usually costs less than the first, scaling up is surprisingly inexpensive—often $75–$100 per additional million.

Coordinating the details without sales pressure

Start with your current carrier; bundling keeps costs low. Confirm that legal‑defense costs sit outside the coverage limit (most modern policies do). Then check exclusions: business pursuits, certain watercraft, or rental properties in an LLC can require separate riders. Finally, raise the liability limits on home and auto to the carrier’s minimum for umbrella eligibility; doing so often adds only a few dollars a month.

Stewardship, not fear

Buying liability insurance is not fear; it is responsibility. We lock church doors at night yet trust God for safety. In the same way, we can hold adequate insurance while resting in His sovereignty. An umbrella policy preserves your ability to pay a neighbor’s medical bills, continue tithing, and fund future ministry even when life spins beyond your control.

Let’s find your “refuge number” together

If your home or auto limits stop below $500,000—or if a teenager just earned a learner’s permit—this is the moment to review coverage. I invite you to schedule a 30‑minute “Check‑In.” In that conversation we will:

  1. Map your current policies and limits.
  2. Estimate exposure based on driving patterns, property ownership, and vocation.
  3. Discuss how we could partner on this and your other financial goals.

Set a time that works for you here:
https://calendly.com/matthew-unburdenedfp/introductory-meeting

We cannot predict tomorrow’s lawsuit, but we can prepare for it today. Let’s make sure one accident never unravels the callings God has placed on your life.

Footnotes
  1. Leon County Circuit Court Civil Verdicts, March 2024.
  2. Insurance Information Institute, Trends in Personal Liability Verdicts, 2024.
  3. National Association of Insurance Commissioners, Personal Umbrella Premium Study, 2023.
  4. ISO/Verisk, Personal Umbrella Claim Severity Report, 2023.
  5. Centers for Disease Control, Teen Driver Crash Statistics, 2023.
  6. Insurance Information Institute, Dog‑Bite Liability Claim Costs, 2024.

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