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Compare umbrella coverage

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

Our top pick: USAA umbrella insurance

  • Coverage up to $1 million
  • Rates starting at $19 per month
  • Works alongside USAA car and home insurance
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This article was reviewed by Andrew Flueckiger, a member of the Finder Editorial Review Board and certified insurance counselor and licensed insurance agent in five states.

You could find yourself in a tough position if you’re liable for more damage than your insurance covers. High net worth individuals are especially at risk for a lawsuit. To avoid unexpected debt, consider taking out an optional umbrella insurance policy, available through many home or car insurance companies.

Do I need umbrella insurance?

Umbrella insurance isn’t necessary for everyone. To figure out whether you need it, look at your current car, home or renters policies and determine if the maximum limits protect all your financial and property assets.

You might need umbrella insurance if you:

  • Have a high net worth or high-value asset.
  • Are a target for lawsuits, like a CEO or public figure.
  • Hire others to work at your home, like gardeners or contractors.
  • Have an aggressive dog or a dog with a history of biting.
  • Are a landlord or own property on homesharing sites.
  • Volunteer or work with children or animals.
  • Carpool with others or are a rideshare driver.
  • Need worldwide auto liability coverage.

You might not need umbrella coverage if:

  • You 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.

How much personal umbrella insurance do I need?

To find how much umbrella insurance you need, review your net worth, home value, retirement plans and investments. Then, consider how much coverage you have with your current policies. The rule of thumb is to buy enough umbrella insurance coverage to equal your net worth.

However, you might consult a financial adviser if you have significant assets, such as a net worth over $500,000. The general rule is based on how liability lawsuits often use your current assets or insurance coverage to settle the case.

Umbrella policies usually range from $500,000 to $5 million in coverage. However, you also need a minimum amount of liability coverage on your home and auto policies to qualify, such as $300,000 bodily injury liability and $100,000 of property damage liability on your auto insurance policy.

How to calculate how much umbrella insurance coverage you need

For example, say your home is worth $400,000, your cars are worth $50,000, and your savings and retirement are worth $250,000. Your net worth totals $700,000, minus any debts you have. An umbrella policy of $1 million should fully protect all your assets if you’re sued, even in a worst-case scenario.

How much does umbrella insurance cost?

A $1 million umbrella insurance policy typically costs between $150 and $300 each year, according to the Insurance Information Institute.

Those rates may seem lower than a typical car or home insurance policy because umbrella coverage works in addition to your home and auto policies. Your risk of maxing out the coverage is lower with this policy.

Does umbrella insurance have a deductible?

Umbrella insurance doesn’t have a deductible, but it might come with a self-insured retention amount. This functions similarly to a deductible in that you may have to pay out of pocket, but differs in that the self retention amount doesn’t reduce your claims payout.

The general rule of thumb is that the self-insured retention only applies if the umbrella policy covers you for something that your underlying insurance doesn’t. Otherwise, your underlying policies have their own deductible, so you won’t be hit twice.

Compare car insurance with umbrella coverage

You can often add umbrella insurance with your existing car insurer, but high net worth individuals may need a separate stand-alone umbrella policy. Compare car insurance companies that offer umbrella insurance.

Name Product Roadside assistance New car protection Accident forgiveness Safe driver discount Available states
All 50 states
Discover coverage that’s broader than competitors, valuable discounts up to 30% off and perks like shrinking deductibles that reward no claims.
The AARP Auto Insurance Program from The Hartford
All 50 states
Enjoy low rates for mature drivers, plus perks like new car replacement and lifetime repair guarantees. Only for drivers over age 50.
All 50 states
Affordable car insurance with highly rated customer service. Only available to military members and veterans and their family.
All states & DC
Enter your current policy and get quotes in 30-seconds from 100+ companies, then get help to switch insurers for free.
Available in 30 states
Track your driving to receive a low rate that reflects your driving skills, and enjoy a fully app-based policy experience.

Compare up to 4 providers

What is umbrella insurance and how does it work?

Think of it as an extra safety net, offering additional liability coverage. Umbrella insurance is liability coverage that protects you and family members living in your household over and above your existing insurance policies.

Say you needed to make a claim on your car, home, renters, boat or other personal liability insurance. Umbrella coverage kicks in with extra liability coverage if the damage costs above your maximum limits on your current policies, or if you don’t have an existing policy that covers the liability.

Umbrella insurance covers a wide range of scenarios involving liability:

  • A car accident that’s your fault exceeds your auto insurance limits.
  • Another child’s parents sue you when your child starts a fight.
  • A worker gets injured on your property and wants compensation for medical bills beyond your home policy limits.
  • You’re sued for a social media message or review you posted.
  • Someone gets hurt at your home while enjoying your playground, trampoline or pool.
  • You hurt someone while skiing or hunting.

Personal umbrella insurance policy in action

What isn’t covered by an umbrella policy?

Watch out for some areas that your umbrella insurance doesn’t cover, including:

  • Your property damage. Damage that happens to your home, car, motorcycle or RV won’t be covered by this policy. So if you back your car into someone else’s vehicle, your umbrella insurance won’t kick in for your car’s repairs.
  • Your injuries. If you get hurt, your own health insurance or the property owner’s liability insurance would cover the medical expenses.
  • Your business. If you own a business and want extra liability protection, you’ll need a commercial umbrella liability policy.
  • Family with their own policies. Your policy may not extend to your spouse, children or other household members if they have their own home or auto policies.

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. To get the best price, compare car insurance companies with umbrella coverage.

Common questions about umbrella insurance

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