What is an Umbrella Policy?

What is an Umbrella Policy?

Umbrella insurance coverage is one of the most misunderstood insurance policies. I have been asked many questions over the years about umbrella insurance and here are the most common questions and answers.

If my car is not covered and it is stolen my umbrella policy will cover it?  NO

Can I purchase the minimum insurance in the state and then purchase an umbrella policy to cover everything else?  NO

Can I just purchase an umbrella policy to cover all my risk so I don’t have to purchase car insurance or home insurance?  NO

So… what does an umbrella policy cover?

It is EXTRA LIABILITY over your assets, like your home, vehicles, boat, rental properties that are ABOVE the minimum liability coverage the insurance company sets.

Here is an example:  You own 2 vehicles and all the licensed drivers in your household are listed on this policy.  Then you purchase $250,000/ $500,000/ $100,000 coverage on your car insurance.  The $250,000 represents one person in another vehicle that was injured by you.  The $500,000 is for everyone the other vehicle, the maximum that the insurance company will pay for everyone injured in the other vehicle that is injured.  The $100,000 is the property that you damage, like the other vehicle in a car accident or if you lose control and drive into a structure, like a home or business.

Why would someone purchase an umbrella policy?  Because they have assets to protect. They own a home, a vehicle, have a job, have retirement savings, then you have assets.  If you know your net worth, the calculation is easier.  This is not exact, but a guideline.


$500,000 to $1.5M in assets = $1M umbrella needed

$1.5M to $2.5M in assets = $2M umbrella needed

$2.5M to $3.5M in assets = $3M umbrella needed


The coverage can go all the way to $5M for standard policies and beyond for higher net worth clients.

Insurance should be used to insulate your risk.  If you are sued, the insurance company will fight on your behalf.  The goal is to have the insurance company settle your claim within your policy limits.  If you have low policy limits and there is severe loss, you have a high risk of being sued.  PROTECT YOURSELF and YOUR FAMILY.

Just picture a HUGE umbrella over your cars, your motorcycle, your home, your rental properties and your retirement account.  When there is a big storm which represents a lawsuit, if your umbrella is large enough, IT WILL COVER YOU IN THE STORM OF LIFE.

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    Julie Jakubek, MBA has owned her Allstate Insurance agency for 20 years. Julie is an almost native of Arizona, long-time Tempe resident, and Xavier College Preparatory alumni. She earned her Bachelor’s degree from NAU. Julie then earned her MBA at Pepperdine University. In 2014, she moved her agency from Scottsdale to Phoenix, where she purchased a free standing, mid-century modern building in the Arcadia area. Please stop by and visit at 4650 East Thomas Road (the corner of 47th St and Thomas) in Phoenix. Community and giving back is essential to Julie, so she donates her time, talent and treasures. Julie’s passion is teaching financial literacy and money management. She currently facilitates an eight week class called “Moving Ahead Through Financial Management” at Fresh Start Women’s Foundation. Julie believes in the mission of Arizona Council of Economic Education (ACEE), an organization that helps educators teach their children about finance and the economy. She has been on their board of directors for the past eight years. Julie is also a member of the Greater Phoenix Chamber of Commerce, the Tempe Chamber of Commerce, the Scottsdale Chamber of Commerce and the Better Business Bureau. Julie supports several other local nonprofits, including: New Leaf, United Food Band, St. Mary’s Food Bank and St. Vincent de Paul, to help underprivileged citizens that have fallen on hard times. Julie is currently on the state board of directors for the National Association of Insurance and Financial Advisors (NAIFA- Arizona). She has received many awards including Business Women of the Year for the Tempe Chamber of Commerce. Allstate accolades are numerous including #1 agent in AZ in 2009 and #3 agent in the entire country that year. Julie’s office culture focuses on taking care of people. It is evident when you meet Julie and her staff that they are friendly, helpful and knowledgeable. Every day as an Allstate Personal Financial Representative Julie’s work is different, interesting and sometimes challenging. She has made it a goal to learn something new every day, even with 20 years in business. Julie truly enjoys helping people and assisting them in choosing the protection that best fits their life. Julie says, “My favorite part of my career is empowering my team, my community and our customers to make great decisions to positively impact their future.”

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