Compare umbrella coverage

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

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Nobody wants to be liable for more damages than their insurance covers. If you have a high net worth, you’re especially at risk for an unexpected lawsuit. To avoid getting into debt because of an accident, consider taking out an optional umbrella insurance policy.

What is umbrella insurance?

Umbrella insurance is a type of liability insurance that protects you beyond or instead of the coverage offered by your basic car insurance or home insurance policy.

Umbrella insurance will pay for what you owe beyond what’s covered by your home, auto or renters insurance. It’s especially recommended for individuals with significant assets, those who stand to lose a lot from getting sued and 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 or defamation for a social media message or review you posted.
  • Someone is hurt on your property while enjoying your playground, trampoline or pool.
  • You hurt someone while skiing or hunting and they’re seeking a settlement.

How does umbrella insurance work?

Umbrella insurance covers you over and above your existing policies. Think of it as an extra safety net.

Say you needed to make a claim on your car, home, renters, boat, RV or other insurance. Umbrella coverage kicks in if the costs for damages are above your maximum limits, or if you don’t have an existing insurance policy that would cover the damage.

Usually you can add umbrella coverage to your existing policies, but high net worth individuals can sometimes buy a separate umbrella policy.

Do I need 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.

Is umbrella insurance worth it?

Consider umbrella insurance if:

  • You have a high net worth or high value asset.
  • You’re a target for a lawsuit, such as a CEO or public figure.
  • You regularly work with other people as part of your job.
  • You hire gardeners or other services to work at your home.
  • Your dog has shown aggressive tendencies.
  • You’re a landlord or you own property on homesharing sites.
  • You volunteer or work with children or animals.
  • You’re a rideshare driver or you often carpool with others.

You might not need umbrella coverage if:

  • You don’t have high car or home insurance limits.
  • You don’t have a lot of assets.
  • You don’t work with, commute or hire other people.
Name Product Umbrella coverage offered Maximum coverage
$5 million
Choose from a long list of discounts and coverage for almost any driver.
$1 million
Customize your policy and get quotes online in minutes. Many drivers could save up to $500 by switching.
The Hartford
$5 million
Enjoy benefits including rate lock, no-drop policies and accident recovery. Exclusively for drivers 50+.
Liberty Mutual
$1 million
Build a policy online or with local agent support, with features like better car replacement and accident forgiveness.
$5 million
Enjoy having your own dedicated agent to help you get the best discounts and coverage.
$5 million
Convenient online quotes, coverage and claims for tech-savvy drivers.

Compare up to 4 providers

How much umbrella insurance do I need?

Umbrella insurance policies often max out at $500,000 to $1 million limits.

The more assets you have, the more coverage you’ll need. Review things like your net worth, home value, retirement plans and even your interest. Consider how much coverage you have with your current policies and if you’ll need extra in the case something was to happen.

For example, say your home is worth $400,000 and your cars are worth $50,000 total. Plus you have savings and retirement of about $250,000. Your total net worth is around $750,000, minus any debts you might have. An umbrella policy of $750,000 should fully protect all your assets if you were sued, even in a worst case scenario lawsuit.

How much does umbrella insurance cost?

A $1 million umbrella insurance typically costs between $150 and $300 each year, according to the Insurance Information Institute. The exact cost depends on your personal profile, such as your age and where you live, plus other factors depending on your insurance company.

Those rates may seem lower than typical car or home insurance policies. That’s because umbrella coverage is typically added onto existing policies, similar to how you’ll save by bundling insurance. Your risk of maxing out your policy is also lower, since typically your other insurance will kick in first.

How do I get umbrella insurance?

Before you can buy umbrella insurance, insurers will require you to already have significant coverage under your auto or homeowners insurance. However, if you don’t meet the minimum coverage amounts you may be required to increase your liability limits. If you lower your limits or your policy lapses, your umbrella policy starts paying after you’ve paid the maximum liability coverage amount.

Chances are your current insurer will offer umbrella insurance. You’ll most likely need an existing insurance policy with the provider in order to take out an umbrella policy or add it on to existing coverage.

Does umbrella insurance 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.

Umbrella insurance in action

George’s auto insurance covers him up to $500,000 in the event of bodily injury to others in a car crash. His car crashes into another car, and the resulting medical expenses and property damage total $750,000. After paying his car insurance deductible, George’s car insurance pays out $500,000.

He’s still on the hook for that extra $250,000. His umbrella insurance covers bodily injury liability and property damage up to $500,000, so he uses his umbrella policy to cover the remaining damage. He would still have up to $250,000 to pay for legal fees or additional damage if he’s sued by any of the other drivers.

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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