How does an umbrella policy work in Mississippi?

I have a house in Mississippi and several cars. I have four drivers in my household, including my spouse and two teenage drivers. I’ve got both Mississippi auto insurance and Mississippi homeowners insurance. Do I need a Mississippi personal umbrella policy too? Why or why not?

Before you understand what an umbrella policy is and if you need it, it’s important to understand what Mississippi liability insurance is. If you have auto insurance, homeowners insurance, renters insurance, or condominium insurance, you also have liability insurance as an essential part of those policies. 

Liability insurance protects you when you or a covered family member causes some type of property damage or physical injury to another person. So your auto liability insurance covers you if you cause a car accident that injures another driver or passenger. And your home liability insurance covers you if someone is injured at your home, or if you or covered family member hurts someone or damages someone’s property (e.g., your child breaks the neighbor’s window with a baseball). 

Liability insurance pays for repairing or replacing damaged property of others. It also pays for medical expenses for injured parties, and it even pays your attorney fees, court costs, and any financial settlements or judgments that you have to pay if you are sued. But both your auto insurance and your home insurance have coverage limits that are specified in the policy. If you’re sued, your policy limits may not be sufficient to cover a large financial settlement. 

A Mississippi umbrella policy offers excess liability coverage that kicks in when the limits of an underlying policy — including homeowners insurance, renters insurance, condominium insurance, or auto insurance — have been exhausted. Anyone who wants protection from the devastating affects of a lawsuit should at least consider purchasing an umbrella policy.

What qualifies me for an umbrella policy in Mississippi?

Umbrella insurance policies in Mississippi are typically sold in million-dollar increments, such as $1 million, $2 million, and $5 million. These limits kick in when the limits of the applicable underlying policies have been exhausted. 

That being said, you need to have a certain level of underlying Mississippi home and auto insurance in order to qualify to purchase an umbrella policy. These requirements vary depending on the insurance company, but typical minimum underlying insurance requirements are: 

• Auto insurance: 
  • Bodily injury liability coverage of $250,000 per person/$500,000 per accident
  • Property damage liability coverage of $100,000 per accident
• Homeowners insurance:
  • Personal liability coverage of $500,000

Some umbrella insurance providers require you to have your auto and homeowners insurance with them before they will issue you an umbrella policy. 

What is covered under umbrella insurance in Mississippi?

Personal umbrella policies in Mississippi cover defense costs, attorney fees, and financial settlements or judgments associated with covered claims that exceed the limits of your underlying auto, home, or boat insurance policies. 

In general, personal umbrella policies offer “follow form coverage.” This means that the umbrella policy typically covers what the underlying policy does. 

Umbrella insurance in Mississippi typically covers the following types of claims for any person who is covered under the primary insurance:

• Personal injury
• Advertising injury
• Property damage liability
• Slander
• Libel
• Defamation of character
• False arrest, detention, or imprisonment
• Malicious prosecution
• Mental anguish

Your umbrella policy may offer coverage for certain losses that are not covered by the underlying policies, including covering you worldwide. So if you cause a car accident while driving abroad, your Mississippi auto insurance policy might not cover you, but your umbrella policy would.