💰 The Value Proposition
$1 Million Coverage
$150-300
per year
$2 Million Coverage
$225-400
per year
Cost Per $1M
~$75
additional coverage
What Is Umbrella Insurance?
Umbrella insurance provides extra liability coverage above your auto and home policy limits. It kicks in when your underlying policies are exhausted.
Example Scenario:
You cause a serious car accident. The victim's medical bills and lost wages total $800,000. Your auto policy has $300,000 in liability coverage.
✓ What Umbrella Insurance Covers
Liability Situations
- • Car accidents you cause
- • Injuries on your property
- • Dog bites
- • Accidents on rental properties
- • Boat/watercraft accidents
- • ATV/golf cart accidents
Often Includes
- • Libel and slander
- • False arrest/detention
- • Malicious prosecution
- • Invasion of privacy
- • Worldwide coverage
- • Legal defense costs
❌ What Umbrella Insurance Does NOT Cover
Never Covered
- • Your own injuries or property damage
- • Intentional or criminal acts
- • Business activities
- • Professional malpractice
- • Damage to property in your care
Varies by Policy
- • Workers' compensation claims
- • War and nuclear hazards
- • Contractual liability
- • Pollution claims
Who Needs Umbrella Insurance?
The general rule: your umbrella coverage should equal your net worth. If you're worth $500K, get at least $500K in umbrella coverage.
✓ Definitely Need It If You:
- • Have significant assets (home equity, savings, investments)
- • Own rental properties
- • Have a swimming pool or trampoline
- • Own dogs (especially "aggressive" breeds)
- • Have teen drivers
- • Volunteer on boards or coach sports
- • Have high-earning potential (future wages can be garnished)
⚠️ Consider It If You:
- • Have modest assets but want protection
- • Are building wealth and want to protect it
- • Host parties or events at your home regularly
💰 How Much Coverage Do You Need?
Also consider future earnings. A lawsuit can garnish wages for years.
Requirements to Get Umbrella Insurance
Umbrella policies require minimum underlying coverage on your auto and home policies:
Auto Requirements (typical)
- • Bodily injury: $250,000/$500,000
- • Property damage: $100,000
- • Uninsured motorist: $250,000/$500,000
Homeowners Requirements (typical)
- • Liability: $300,000-500,000
- • Some require additional endorsements
Strategy: Most insurers require you to bundle umbrella with existing auto/home. Get umbrella from your current insurer for best pricing.
The Bottom Line
Umbrella insurance is the best deal in personal insurance: $1 million of liability protection for $150-300/year. If you have any assets to protect—home equity, retirement accounts, future earnings—you need it. The rule of thumb: coverage should equal your net worth. At $75-100 per additional million, there's no reason to underinsure. Bundle with your current auto/home insurer for the best rate.