Last Updated on July 20, 2025 by The Insurance Pros
Michigan Personal Umbrella Insurance: Why You Need It
A Michigan personal umbrella insurance policy offers an extra layer of protection when your standard auto, home, or renter’s liability coverage isn’t enough. With rising medical costs, increased lawsuits, and the new Michigan no-fault auto insurance reform, protecting your financial future has never been more important.
What Is a Personal Umbrella Policy?
A personal umbrella policy provides additional liability coverage above the limits of your auto, homeowners, or watercraft policies. It also covers some claims excluded by standard liability insurance, like libel, slander, or false arrest.
For example, let’s say you cause a serious accident. Your auto policy covers $250,000 in bodily injury liability per person. But the injured party sues and wins a judgment of $800,000. Your umbrella policy would cover the additional $550,000, protecting your savings, home, and future income.
How Umbrella Insurance Helps Michigan Drivers Post-Reform
Michigan’s auto insurance reform now allows injured drivers to sue the at-fault party when their medical PIP benefits are exhausted. This means you could be on the hook for another driver’s excess medical costs—especially if they selected a limited PIP policy. A personal umbrella policy helps fill that gap and more.
Additional Coverage Examples
- ✔️ Excess medical bills after a serious auto accident
- ✔️ Pain and suffering lawsuits
- ✔️ Legal defense costs, even if you’re not found liable
- ✔️ Broader protection, including libel, slander, and defamation
Typical Policy Limits and Costs
Umbrella policies typically start at $1 million and can go up to $5 million or more. Most Michigan residents can add $1–$2 million in coverage for as little as $200–$400 per year.
What Assets Can You Protect?
- 🏠 Home equity and vacation properties
- 💵 Retirement accounts and savings
- 🚗 Future income from wage garnishment
How Does an Umbrella Policy Work?
Umbrella insurance “drops down” to fill gaps when underlying coverage is exhausted. There is typically no deductible for umbrella claims, and it functions on a claims-made basis. Coverage kicks in once your base liability limit is met.
Compare Your Liability Coverage
| Coverage Type | Without Umbrella | With $1M Umbrella |
|---|---|---|
| Auto Injury Lawsuit | $250,000 | $1,250,000 |
| Slip & Fall Claim | $300,000 | $1,300,000 |
| Defamation Lawsuit | Not Covered | Covered |
🧠 Mini Quiz: Do You Need Umbrella Insurance?
Answer YES or NO to the following:
- Do you own a home or condo?
- Do you have teenage drivers or do you drive frequently?
- Do you have more than $100,000 in savings or retirement?
- Do you host guests or gatherings at your home?
- Do you own pets or a pool?
If you answered “YES” to two or more… umbrella coverage could be a smart, affordable solution to protect your assets.
🛡️ Get Your Michigan Umbrella Insurance Quote
Also see: Michigan Bodily Injury Liability Insurance Requirements guide
