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What Every Manitoban Should Know About Umbrella Insurance in Canada

August 21, 2020
Updated: April 21, 2022


Every day, incidents happen, lawsuits get filed, and people—even Canadian people—get sued. Thankfully, there’s Umbrella Insurance.

If you’re sued for something and found to be at fault, Umbrella Insurance extends your existing liability coverage so that it’s not just your property that’s protected—but your financial wellbeing, too. Learn how Umbrella Insurance works for you and your home, and whether or not it’s the right fit for your life.

What Is Personal Umbrella Insurance?

Personal Umbrella Insurance is a type of—you guessed it—personal insurance that extends any liability insurance you already have in place. In other words, it’s extra liability coverage, which you can add to your existing policy.

What Does Personal Umbrella Insurance Cover?

Beyond the standard liability coverage you have in place, Personal Umbrella Insurance covers the expenses you’d have to pay a third party if you were sued for damages or injury, and found to be at fault. It also covers injury to other people and damage to other people’s possessions.

So for example, if your boat was stolen, taken for a joy ride, and left on the shore damaged, your property insurance—which includes basic liability coverage—would cover it.

But, if you were cruising with friends and got in an at-fault accident—and someone involved sued you—your property insurance wouldn’t be enough. It would still cover any damage to your boat, but you’d be on the hook for legal expenses and injury costs for that person.

Personal Property Insurance Covers:
  • Your home
  • Your car
  • Your watercraft
Personal Umbrella Insurance Covers:
  • Legal expenses if you’re sued and found at fault
  • Injury to others
  • Damage to others’ possessions

What Doesn’t It Cover?

As the policyholder, Umbrella Insurance will never cover your own costs, and it does not protect your property (you’ll need property insurance for that). And, it won’t cover anything that isn’t included in your coverage, like criminal activity or exclusions listed in a policy.

What Is Umbrella Insurance For Your Home?

Personal Umbrella Insurance for your home is additional liability coverage designed to added-on to your base property insurance plan.

What Does Home Umbrella Insurance Cover?

Every policy is different, but typically Umbrella Insurance for your home will offer additional coverage for things like personal and bodily injury (including medical bills and loss of income) and property damage (if you happen to cause damage to someone else’s property or landscaping).

What Doesn’t It Cover?

It doesn’t cover your personal property—that’s what you’ll need your base property insurance plan for! A personal property Umbrella Insurance policy also doesn’t cover business losses. (For anything related to your business, be sure you talk to one of our Business Insurance Consultants.)

When Do You Need Umbrella Insurance?

Your standard property and home insurance only cover the costs of replacing or repairing the things you own if they’re lost or damaged in a covered way. It doesn’t help you pay third-party costs if you’re at fault for that damage! 

Here are some examples of when to use each type of insurance:

→ If a tree on your property falls on your home because of a storm, you’ll file a claim under standard property insurance (which includes basic liability insurance).

→ If a tree branch falls on your neighbor because the tree was rotten—and they sue you because you knew about it—you’d need umbrella insurance. Your basic property insurance won’t cover this!

Do I Need To Be Wealthy To Benefit?

This is a common question, but no, you don’t! Even if you don’t have any assets, being held liable can lead to “wage garnishment” which means that you could be legally required to give a portion of your income to your creditor.

But, before you buy, remember that Umbrella Policies are meant to serve as back-up, picking up where your auto insurance and homeowners insurance policies leave off, so make sure you have these in place first. 

(And, because they’re designed to be met by your other policies first, know that Umbrella Policy deductibles are always high.)

Do I Need Liability Insurance If I Have Umbrella Liability Insurance?

Yes! We always recommend adding on Umbrella Insurance because even if your existing policy offers a substantial amount of coverage, it will always have its limits. And, in cases where people are sued, courts frequently award damages that far exceed those limits, which is why some people choose to add this coverage.

Just remember that your Umbrella Liability Insurance policy is extra coverage that you can only access if you already have liability insurance in place. You can only use it once your primary liability policy limits are exhausted, or if they fall short of the damages you’re being sued for.

Umbrella Insurance vs Blanket Insurance for Homeowners

People often get confused between Umbrella Insurance Coverage for Homeowners and Blanket Insurance Coverage for Homeowners, so let’s start by clearing this up!

Blanket Insurance Coverage for Homeowners pays you. So if, as the insured policyholder, something unforeseen or unfortunate happens on your property, you’re covered and paid out.

Umbrella Insurance Coverage for Homeowners pays a third party. If you, the policyholder, are sued and found to be at fault, it helps you pay others for things that aren’t covered by your primary liability policy, like:

  • Damages or Injury Costs
  • Liability & Defense Costs
  • Liability & Defense Expenses

So, Is Umbrella Insurance Worth It?

It depends on your needs, but like with all insurance, if you find yourself in a situation where you have to use it, you’ll always be glad you have it! The best thing to do is reach out and talk to one of our Insurance Consultants who can make sure you get the coverage in place that’s right for you.