Use our calculator to determine how much umbrella insurance is right for you. Having too much liability insurance is better than having too little.
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An umbrella insurance policy provides additional coverage outside the existing limits of other policies, like car insurance and homeowners insurance. It offers protection for a number of situations; For example, if you're sued for libel, get into a car accident abroad, or if your dog causes harm to a guest, umbrella insurance can help further protect your assets if these claims aren't covered by existing liability policies.
Umbrella coverage kicks in when the underlying liability limit of an insurance policy is reached, and it's usually sold in increments of $1 million, up to $5 million. The cost of umbrella insurance can range anywhere from $200 on the low end to over $1,000 for a high limit, according to Trusted Choice, with an average cost of about $380 per year providing $1 to $2 million of protection. However, how much you'll pay for umbrella insurance depends on several factors, like where you live, how much coverage you buy and your risk profile.
Use this calculator to assess how much umbrella insurance coverage you need.
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Most umbrella insurance policies offer coverage for the following:
Before you can purchase an umbrella insurance policy, most insurers will require you to have around $250,000 of liability insurance on your auto policy and $300,000 of liability insurance on your homeowners policy, says the Insurance Information Institute (III).
If you buy your home and auto insurance from the same insurer, you'll typically get a discount of 10% to 15% on your annual premiums, and you may get an additional discount on the umbrella policy as well. You can offset at least some of the umbrella premium by taking larger deductibles on your auto and home insurance policies.
With a single insurer, your coverage is less likely to fall through the cracks if the requirements for the umbrella policy change. And if you're sued, you'll have one set of defense lawyers for the entire case. Otherwise, agents advise you to buy the umbrella policy from your auto insurer because most large lawsuits involve auto accidents.
If your current home or auto insurer won’t sell you an umbrella policy — because your dog's breed is classified as potentially dangerous — ask an independent agent who represents multiple insurers to help you find a "stand-alone" umbrella policy.
In some cases, it makes more sense to purchase an umbrella insurance policy, especially if you have a lot of assets or a high chance of being sued. Progressive advises individuals whose net worth exceeds their maximum liability coverage via their standard insurance policies to open an umbrella policy in order to avoid any negative financial repercussions.
Furthermore, according to the III, you should purchase an umbrella insurance policy if certain activities and lifestyle risks raise the likelihood of someone suing you, such as:
You should also consider opening an umbrella policy if you:
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