Umbrella insurance is a policy that provides a lot of extra liability coverage – in addition to your liability limits on your home insurance and auto insurance.
You may need to increase your underlying liability limits on your car insurance policy and most insurers require you to have a car insurance policy with them before you buy an umbrella policy. But solely based on umbrella insurance, these insurance companies stand above the rest.
Liberty Mutual’s umbrella policy offers broad coverage with limits ranging from $1 million to over $10 million. It provides worldwide coverage and extends your liability protection to include things such as libel and slander, including on rental properties you may own. Overall, it’s a comprehensive policy that comes with a wide range of liability limits.
Progressive umbrella policies can be easily bought online, though you’ll need to make sure you have high enough underlying liability limits on your auto insurance in order to qualify, similar to other companies. But it offers a $500,000 umbrella starting option, which is lower than most companies and could be good for people who don’t need the minimum $1 million in coverage.
USAA has a relatively loyal client base on its auto insurance, its cheaper auto insurance rates for people with military connects may offset higher umbrella costs compared to other insurers. It’s a fairly standard umbrella option with limits between $1 million and $5 million, but a good choice if you already have your auto insurance with USAA.
Amica offers two types of umbrellas: a traditional umbrella and a dividend umbrella. The dividend umbrella option is fairly unique with umbrella policies. It costs more to purchase up front, but it can return between 5% and 20% of your annual premiums. However, the dividend umbrella policy isn’t available in every state.
Finder’s editorial team works countless hours analyzing insurance companies and policies, and compares customer satisfaction scores, discounts, rates, coverage options and online reviews. We also factor in ratings from sites such as AM Best, J.D. Power and the Better Business Bureau.
Umbrella insurance policies offer peace of mind that you won’t have to dip into personal assets if you’re sued or liability costs are higher than your car or home insurance limits. But there are several things to keep in mind when buying an umbrella policy:
Umbrella vs. excess. Excess policies provide extra liability — with the same coverages and exclusions as your underlying auto and home policies. Umbrellas should provide a broader coverage than your underlying policies and give you coverage that you might not have. Check your policy to see what type of coverage you have.
Worldwide coverage. Most umbrella or excess policies provide liability coverage anywhere in the world, which is a solid feature. Double check that your coverage isn’t limited to the United States.
Coverage for family members. Many umbrella policies extend liability to household family members, though you’ll want to double-check and make sure they’re listed on your policy.
Accurate underlying insurance. When applying for umbrella insurance, you’ll need to state what your underlying insurance policies are and what’s insured, such as vehicles, homes you own and rent out, boats, motorcycles and anything else. This way, you’ll ensure all of your assets are covered.
Retention amount. Umbrella policies don’t have a deductible, they have a self-retention amount. This is the amount you’ll pay before your umbrella policy kicks in. It functions similar to a deductible and can lower your rates if you choose a higher amount.
Check the exclusions. Every insurance policy has exclusions and umbrella policies typically vary more from company to company than other types of insurance. Be sure to read your policy and look for the exclusions so you know what’s not covered.
How much does umbrella insurance cost?
How much you pay for your umbrella policy depends on where you live and how many vehicles or homes you own. But typically, $1 million in coverage costs between $150 and $300 a year, or $12.50 to $25 per month. Umbrella coverage is sold in increments of $1 million, with the next million adding $75 to your annual premium and an additional $50 for every million after that.
Coverage amount
Average annual cost
$1 million
$150 – $300
$2 million
$225 – $375
$3 million
$275 – $425
$4 million
$325 – $475
$5 million
$375 – $525
Bottom line
Umbrella insurance provides extra liability coverage, which can be valuable if you’ve caused a serious accident and are responsible for somebody else’s injuries or property damage. Most insurance companies want you to carry a car insurance policy with them before offering an umbrella, compare car insurers offering umbrella insurance to find the best one for you.
Andrew Flueckiger is a licensed insurance agent and Certified Insurance Counselor with experience in insurance and finance. A graduate of Indiana University, Andrew contributes a wealth of knowledge and experience to Finder. When Andrew isn’t writing, reading or practicing insurance, he can be found spending time with his family and playing the guitar.
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