Umbrella insurance is a type of personal liability insurance that provides additional coverage beyond the limits of your existing insurance policies, such as your auto or homeowners policies. It provides coverage for damages or injuries you may cause to others or their property, as well as for personal injury claims, such as libel, slander, or false arrest. If your primary insurance policy limits are exhausted by a claim, umbrella insurance serves extra protection for you and for your assets. Umbrella policies generally have higher coverage limits than standard liability policies, with limits starting around $1M. Relative to other types of insurance, umbrella coverage is usually inexpensive, though the cost depends on the limit of the coverage and the policy.
Is Umbrella Insurance Required in Colorado?
No, umbrella insurance is not legally mandated in Colorado or any state within the US. Though it is not required, umbrella insurance can be a great option for those looking for additional coverage above the limits of their other insurance policies. If you have significant assets or if the value of your investments exceeds the liability limits of your insurance policies, umbrella insurance can provide extra protection for you and for your assets in the case of a lawsuit. Umbrella coverage may be appropriate for those who face higher risk of litigation, such as those who have a swimming pool.