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Personal umbrella insurance in Ontario

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What is umbrella insurance?

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Umbrella insurance is a type of liability coverage that extends beyond the limits of property and casualty policies. So if you don’t have enough liability protection on either your auto insurance policy or home insurance policy, an umbrella insurance policy can fill in the gap to ensure you won’t be paying out-of-pocket for expenses such as legal fees, medical bills, and compensatory damages. 

This type of insurance can also protect you against liability risks that wouldn’t otherwise fall under the categories of auto and home insurance. For instance, if you’re being sued for libel or slander, umbrella insurance can pay for the damages involved. And the coverage isn’t only limited to the policyholder – it can also apply to members of your household or your family.

Personal umbrella insurance is generally an affordable way to get a substantial amount of coverage. This is because insurance companies require you to already carry car and home insurance as your primary coverage before purchasing the extended protection.

Although being held liable for your actions may seem unlikely, one lawsuit can quickly turn into immense financial trouble – and an umbrella insurance policy can provide the peace of mind you need, just in case.

Did you know?

Umbrella insurance is sometimes referred to as umbrella liability insurance or personal umbrella insurance.

How much does umbrella liability insurance cost?

Umbrella insurance is generally a low-cost option, considering the amount of coverage you’re able to protect yourself with. Policies with $1 million in coverage typically cost between $150 to $300 each year, but you won’t know the exact cost you’ll be paying until you get a quote from us.

Do I need personal umbrella insurance?

Personal umbrella insurance can be of use to anyone that is at risk of being sued – which essentially means everyone. However, some people are more susceptible to liability claims than others, so be sure to weigh your personal risks when deciding whether to purchase a policy – here are a few situations that can increase your need for umbrella liability insurance. 

  • Home hazards

    You have a pool, hot tub, or trampoline in your backyard.

  • Young drivers

    Your newly-licensed teen takes out the car frequently.

  • Landlords

    You rent out your properties to short-term tenants.

  • Public figures

    You have a large public following on social media.

Umbrella insurance is a secondary policy, meaning your primary policy – such as your auto or home insurance – will pay out first up to its liability limit. Then, the remaining expenses from your claim will then be paid out through your umbrella insurance. While a personal umbrella policy will typically also have its own limit, the idea is that you should be able to reduce your out-of-pocket expenses as much as possible. 

Let’s say you’re being sued for $1 million because your dog violently attacked a guest in your home. Your home insurance has a $500,000 limit in liability coverage, and you’ll need to contribute a $5,000 deductible to this amount. After your home insurance policy has been exhausted, you’re still left on your own to foot the second half of the bill. Having a personal umbrella insurance policy, however, can help cover the remaining costs, including the $500,000 plus any legal expenses involved – so you no longer have to put your house up for sale or dig into your hard-earned retirement savings. 

In this case, you only need to pay a total of $5,000 because the $500,000 home insurance policy acts as a deductible to access the money on your umbrella policy. If you’re being sued for a risk that doesn’t fall under another one of your policies – say for defamation on social media – you’ll need to pay the set deductible on your umbrella coverage.

What does umbrella liability insurance cover?

Umbrella insurance is a form of liability coverage – meaning it’ll foot the bill if you’re ever sued for bodily injury or property damage by a third party. Here are a few examples in which a personal umbrella policy would come in handy.

  • Auto insurance – After hitting a biker while driving on the road at night, you are sued for $1 million, even though you only purchased the minimum third-party liability coverage of $200,000 on your car insurance policy.

  • Home insurance – A mail carrier slips and falls on your icy driveway, and the jury awards them $150,000 in damages, plus another $1,000 for medical benefits. However, your home insurance policy only covers liability claims up to $100,000. 

  • Landlord insurance – Your tenant complains of improper maintenance after experiencing bed bug bites at your furnished apartment. You reach a settlement and agree to pay $100,000 in damages, but your landlord policy only offers $50,000 in liability coverage.

  • Boat insurance –  Your motorboat leaks gas into the water, resulting in an environmental liability claim that totals over $1 million in clean-up fees and compensatory damages. While you do have boat insurance, you never opted in for coverage against this specific risk. 

  • General liability claims – Your teenager gets into a fight at school and breaks a classmate’s arm, causing their parents to seek legal action for $50,000. This situation wouldn’t otherwise be covered by your home or car insurance policy.

What is not covered under an umbrella insurance policy?

Like all insurance policies, personal umbrella insurance has its own exclusions also – here are a few examples in which your insurer will most likely deny your claim. 

  • Bodily injury or property damage of your own – Umbrella insurance is a form of liability coverage, meaning it only pays out when you’re being held liable for actions inflicted on others. It won’t cover the repair of your own vehicle after an accident if you don’t have collision insurance on your car policy.  

  • Business liability claims – You can purchase commercial umbrella insurance to help bridge the gaps in your business policy, but personal umbrella insurance won’t pay out claims related to your company operations. So don’t expect your umbrella provider to cover a slip and fall lawsuit at your restaurant. You'll need to first claim the funds from your commercial general liability policy, instead.
  • Intentional, criminal, or war acts – Like most other types of insurance, you won’t be able to make an umbrella liability claim if you purposely inflicted injury or property damage on someone else. Most policies also have exclusions when it comes to war and terrorist activity.

  • Contractual liability – If you assumed liability in an oral or written contract, your umbrella insurance company typically won’t agree to pay out the damages.

  • Communicable disease – Claims related to communicable diseases could also potentially be denied, so if you’re being sued because your child spread chicken pox at school, you may be on your own.

Affordable Ontario personal liability umbrella insurance

Speak with one of our RH Insurance brokers today to find your best rate for an umbrella insurance policy - it's quick, easy and they're here to help at your convenience!

Frequently asked questions

Is personal umbrella insurance worth it?


What is commercial umbrella insurance?


What's the difference between umbrella and excess insurance?


Author Bio

Matt Hands, Business Director of Insurance

Matt started his professional career at CARPROOF where he honed his marketing and analytical skills for over 3 years. Matt then took his wealth of experience to Ratehub.ca’s Toronto offices, working with insurance providers, agents, and brokers to grow and expand the Insurance business unit. He is a thought leader in the community and a valuable insurance resource to respected publications like the Globe & Mail, Toronto Star, Huffington Post, Yahoo News, and 680 news radio in Toronto.

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