Imagine these scenarios:

• It's a beautiful day outside, and you're enjoying a nice walk in the park. Suddenly, a gust of wind comes along and knocks a tree branch straight into your head, causing serious injuries. You make it to the hospital for treatment, but the medical bills start piling up quickly – and your regular health insurance just won't cut it.
• You're out enjoying your brand-new boat. Suddenly, a strong gust of wind picks up and blows your boat into another vessel. The resulting damage is extensive, and the other boat's owner is suing you for $500,000. If you don't have umbrella insurance, you could be on the hook for the entire amount – plus legal fees. 
• Your business is doing well and you're finally starting to see some real growth. But then, one of your employees makes a mistake that leads to a costly lawsuit. You don't have enough commercial insurance to cover the damages, and the plaintiff is coming after you for the full amount.

These scenarios are sadly all too common, and they illustrate just how important umbrella insurance can be.

Umbrella insurance is not required by law in Colorado. Still, it is always a good idea to have some extra liability coverage – especially if you own a home, a car, or any other assets that could be at risk if you're sued.

What is Umbrella Insurance in Colorado?

Umbrella insurance is a type of liability insurance that provides coverage beyond the limits of your auto or homeowner's insurance policy.

If you own a home, a business, or have significant assets, umbrella insurance can provide an extra layer of protection. For example, if you are sued for causing an auto accident, umbrella insurance can help cover the cost of your legal defense and any damages awarded to the other driver. In some cases, umbrella insurance may even cover defamation or libel lawsuits. 

Umbrella insurance is particularly important in Colorado because of the state's "joint and several liability" law. This law makes each person who is found to be at fault for an accident liable for the entire amount of damages – even if their share of the blame is small. For example, if you're in a car accident that's found to be 50% your fault and the other driver is suing for $100,000 in damages, you could be on the hook for the full amount if the other driver doesn't have enough insurance to cover their half.

What Does Umbrella Insurance Cover in Colorado?

In Colorado, umbrella insurance can cover the following:

• Auto accidents: Costs related to your legal defense and damages awarded to the other driver.
• Damage to property: Covers the cost of repairs if you damage someone else's property.
• Injuries: Helps pay for medical bills and other expenses if you injure someone or if those covered by your policy are injured.
• Watercraft accidents: Helps pay for damages and injuries if you cause an accident while operating a boat or other watercraft.
• Lawsuits: Protects against certain types of lawsuits, such as defamation or libel.
• Rental property liability: Covers damages caused by your tenants to the property or to other people.
  

How Much Umbrella Insurance Do I Need?

The amount of umbrella insurance you need depends on your assets and exposure to risk. If you own a home or have significant savings, you may want to consider purchasing umbrella insurance with a higher limit.



Other factors to consider include your job, your hobbies, and whether you have any children. If you have a high-paying job or participate in risky activities, you may need more umbrella insurance than someone with a low-risk lifestyle.

How Much Does Umbrella Insurance Cost?

The cost of umbrella insurance varies depending on the amount of coverage you purchase. For example, the average cost of umbrella insurance for someone with one home, two drivers and two cars may range from $383 to $999 for coverage ranging from $1 million to $10 million.

On the other hand, the average cost of umbrella insurance for someone with three homes, three drivers, one boat and four cars may range from $563 to $1,578 for coverage ranging from $1 million to $10 million.

What is The Difference Between Primary and Excess Umbrella Insurance?

Primary umbrella insurance is designed to kick in when your auto or homeowner's policy limits have been reached. Excess umbrella insurance provides coverage above and beyond your auto or homeowner's policy limits.

For example, suppose you have a $500,000 limit on your auto insurance policy and cause an accident resulting in $1 million in damages. In that case, your auto insurance will pay the first $500,000 and your excess umbrella policy will pay the remaining $500,000.

What Are Some Common Exclusions For Umbrella Insurance?

Common exclusions for umbrella insurance include intentional acts, nuclear accidents, and war. Make sure you understand the exclusions in your policy before you purchase it.

How Can I Get Umbrella Insurance in Colorado?

There are a few different ways to get umbrella insurance in Colorado. You can purchase a policy from an insurance company, through an insurance agent, or online.

The best way to find umbrella insurance in Colorado is to shop around or work with an independent insurance agent compare rates from different insurers.

How to File an Umbrella Insurance Claim

If you need to file an umbrella insurance claim, the process is similar to filing a claim on your auto or homeowners insurance policy.

First, you will need to contact your insurance company and notify them of the incident. Be sure to have all the relevant information, such as the date and time of the incident, the location, and the names of any witnesses.

Next, your insurance company will investigate the claim and may ask you for additional information. Once the investigation is complete, your insurance company will determine whether or not to pay the claim.

If your claim is approved, your insurance company will send you a check for the amount of coverage you have. If your claim is denied, you will need to pay for the damages out of your own pocket. You can appeal your claim of file a complaint if your claim is denied or unfairly rewarded.