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Umbrella Policy Insurance

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Umbrella insurance can provide extra protection beyond what’s covered by your basic insurance.

Nobody wants to be liable for more damages than their insurance covers. That’s a sticky situation that could result in a huge hit to your net worth.

To avoid getting into debt because of an accident, consider taking out an umbrella insurance policy. It’s not mandatory coverage, like liability coverage — but getting it may provide you peace of mind.

What is umbrella insurance?

Umbrella insurance protects you beyond the coverage offered by your basic insurance. It’s especially recommended for individuals with significant assets, those who stand to lose a lot from getting sued.

Umbrella insurance will pay for what you owe beyond what’s covered by your home, auto or renters insurance. It can cover you for a wide range of scenarios:

  • You’re at fault in a car accident and your costs exceed your auto insurance limits.
  • Your child gets into a fight at school, and another child’s parents sue you.
  • A worker on your property injures himself and seeks compensation for his medical bills.
  • You’re sued for libel.

Before you can buy umbrella insurance, insurers will require you to already have significant coverage under your auto or homeowners insurance.

Does it come with a deductible?

If your basic insurance policy — auto insurance, homeowners insurance — covers part of what you owe, umbrella insurance doesn’t have a deductible. However, if your basic insurance doesn’t pay for anything, you’ll pay a deductible.

What is a deductible?

The deductible is what you’ll pay before your insurance company will pay a claim.
Let’s say you file a claim to your insurance company for a $5,000 car repair bill. Your insurance covers you for that amount, but it includes a $500 deductible. This means you must pay $500 out of your own pocket before your insurance will cover the other $4,500.

Umbrella insurance in action

Your auto insurance covers you up to $500,000 in the event of bodily injury to others in a car crash. But what if you cause a multicar crash and the resulting medical expenses total $750,000? You’d be on the hook for $250,000.

If you have umbrella insurance, you could be covered for that extra $250,000. For example, your umbrella insurance could offer bodily injury liability of up to $500,000.

  • Top-rated insurer
  • Online quotes & claims
  • Bundle and save

Our top pick: Progressive

Save up to 31% with safe driver discounts and bundling all your rides in one convenient policy.

  • Top-rated insurer with 80 years of experience
  • Easy online sign-up and reporting
  • Multiple discounts available
  • Transparent quoting

Compare car insurance policies with umbrella coverage

Name Product Roadside assistance New car protection Accident forgiveness Safe driver discount Available states
Optional
30%
All 50 states
Save up to 31% with safe driver discounts and bundling all your rides in one convenient policy.
Optional
49%
AZ, CA, IL, NJ, OR, PA, VA, WA
Only pay for how much you drive with the Metromile app. Get rates from $29/month plus pennies per mile.
Optional
30%
All 50 states
Enjoy premium perks like better car replacement and accident forgiveness plus local agent support.
13%
All 50 states
Enjoy having your own dedicated agent to help you get the best discounts and coverage.
Optional
Optional
55%
All 50 states
Get free quotes from top insurers for the exact coverage you need in minutes.
Optional
26%
All 50 states
It's quick and easy to get an online quote with Geico, and you might be surprised at how much you could save.
Optional
Yes
All 50 states
Drivers over 50 and AARP members enjoy special car insurance pricing and benefits.
52%
AZ, AR, CO, CT, DE, GA, IL, IN, IA, KY, LA, MD, MI, MS, MT, NE, NM, ND, OH, OK, OR, PA, SC, TN, TX, UT
Root offers simple, affordable insurance that’s ideal for good drivers. Try the Root app for 2 weeks and see how much you could save.

Compare up to 4 providers

Why should I buy umbrella insurance?

Umbrella insurance isn’t mandatory, but it could offer peace of mind. It gives you extra protection if you find yourself liable for more damages than your basic insurance covers.

To answer whether you need umbrella insurance, look at the terms of your current insurance policies. If you’re comfortable with the limits you’re insured for, then you might forgo umbrella insurance. Otherwise, it could protect you from heavy asset losses.

How much does umbrella insurance cost?

A $1 million umbrella insurance typically costs between $150 and $300 each year. The exact cost depends on your personal profile, such as your age and where you live.

How do I buy umbrella insurance?

Chances are your current insurer will offer it — contact them and ask for more details. You’ll most likely need an existing insurance policy with the provider in order to take out an umbrella policy.

Bottom line

Umbrella insurance isn’t mandatory, but it could protect you if you’re liable for large expenses that your basic insurance doesn’t cover. Compare your options for adding umbrella coverage to your car insurance policy.

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