Umbrella insurance provides you extra protection by picking up where liability limits from your other insurance policies, such as auto and home, leave off. This excess liability coverage may save the day—and assets like your home and savings—if you’re hit with a hefty lawsuit.
The best umbrella insurance companies will provide a variety of coverage limits to choose from and offer reasonable rates for both the umbrella coverage and the base insurance policies.
What Is Umbrella Insurance?
Umbrella insurance provides additional liability coverage if the liability insurance limits of your “base” policies are exceeded. Your car insurance and home insurance policies typically are the base policies for umbrella insurance, but other base policies could include a watercraft insurance or renters insurance policy.
Accidental or unexpected events that result in expensive claims or lawsuits could potentially wipe out your assets and savings without umbrella insurance.
How To Find the Best Umbrella Insurance
You want to consider maximum coverage amounts, the number and type of insurance policies you must have from an insurer to be eligible to buy umbrella insurance and cost when identifying the best umbrella insurance for your situation.
Research Coverage Amounts
Finding the best umbrella insurance company starts with discovering which insurers offer the liability limits you want. Most personal insurance companies offer umbrella insurance and what is covered is fairly standard—it’s the maximum limits that vary.
Umbrella insurance policies start at $1 million of coverage. Many companies let you raise the limit in $1 million increments and set their maximum limits at $5 million or $10 million. If you have an abundance of assets to protect, Chubb provides umbrella policies with a maximum coverage limit of $100 million.
| Company | Umbrella coverage limit |
|---|---|
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Up to $5 million
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Up to $2 million
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$5 million or $10 million (varies by state)
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Up to $5 million
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Up to $100 million
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Up to $5 million
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Up to $10 million
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Up to $10 million
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Up to $10 million
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Hanover
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Up to $10 million (top limit in Louisiana is $5 million)
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Up to $5 million
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Mercury
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Up to $5 million
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Up to $5 million
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Safeco
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Up to $5 million
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Shelter
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Up to $5 million
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Up to $10 million
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The Hartford
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$1 million, $2 million or $5 million are your choices
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Up to $10 million
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Up to $5 million
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Westfield
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Up to $2 million
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Consider Base Policies Needed
The number of policies you must have with an insurer before you can add an umbrella insurance policy varies by insurance company. You’ll want to consider this when researching the best umbrella insurance for your particular needs.
For example:
- You must have an American Family auto insurance policy if you want to buy an umbrella insurance from American Family.
- The same goes for Safeco—you have to have a Safeco car insurance policy in place to purchase umbrella insurance.
- With Allstate and USAA, you must have either car insurance or home, condo or renters insurance with the company to purchase an umbrella policy.
- Farmers requires you to have both an auto and property (home, condo or renters) insurance policy with them to buy umbrella insurance.
- Shelter is strict: To get umbrella insurance you must have all other insurance policy types—such as your auto, home, motorcycle or watercraft—with them.
Compare Insurance Costs
Price is also important when looking for the best umbrella insurance company. You’re seeking the company that gives you the overall best price for your base policy (such as auto or homeowners) plus the umbrella policy.
Featured Car Insurance Partners
1
Geico
Good
C-
Low
2
USAA
Excellent
C+
OK
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Low
Who Needs Umbrella Insurance?
If you have considerable assets you can be a target for lawsuits, making you well suited for an umbrella insurance policy. Umbrella insurance also makes sense if you want the security this excess liability coverage provides so that an unexpected event, like a car accident or your dog biting someone, won’t result in financial calamity.
Certain circumstances can increase the likelihood of being sued (putting you more in need of umbrella insurance), including:
- Being a volunteer board member.
- Being a youth sports coach, official or referee.
- Employing people for your household, such as a gardener or house cleaner.
- Having a prominent public or online profile.
- Having a swimming pool or trampoline on your property.
- Having an elderly or teen driver in your household.
- Having kids live at home.
- Hosting large gatherings or parties at your home.
- Owning a dog.
- Owning horses or other large animals.
- Own recreational vehicles like ATVs, boats, golf carts, motorcycles or jet skis.
- Owning rental properties.
And if you have a business, you should consider commercial umbrella insurance that can pay out for liability claims or settlements if your business liability insurance or commercial auto insurance limits are exceeded.
Umbrella Insurance vs. Other Types of Insurance
Umbrella insurance provides liability coverage in excess of what other types of insurance supply, such as your car or liability home insurance. Umbrella insurance is also called “excess” liability because it starts to pay once other liability policy limits are depleted.
Other types of insurance may include more than just liability coverage or offer optional coverage types that can be added to the policy. Umbrella insurance is just liability coverage covering bodily injury, property damage and personal injury.
Umbrella insurance usually gives you worldwide coverage and can cover liability issues that your liability car insurance or home insurance doesn’t cover, such as claims for:
- Defamation of character
- Invasion of privacy
- Libel
- Mental Anguish
- Slander
- Wrongful eviction
Umbrella insurance can complement the other types of insurance you carry in the following ways.
Car Insurance
The foundation of a car insurance policy is bodily injury liability insurance and property damage liability insurance. Bodily injury liability pays for others’ injuries when you cause an accident, and property damage liability pays for others’ property damage you cause in an accident. Umbrella insurance complements your car insurance policy by paying outstanding expenses if your bodily injury liability insurance limits or property damage liability limits— or both—are exceeded.
For example, your newly licensed teen driver causes a multiple-car accident that exhausts your car insurance’s liability limits. Your umbrella insurance policy would pay the remaining liability claims, settlements or judgments due (up to its limits) to the other parties your teen harmed.
Home Insurance
Your home insurance includes liability insurance that covers injuries or property damage caused by you (or your family members) to others, such as your son accidentally throwing his baseball through a neighbor’s window.
If something severe happens, such as a kitchen fire gets out of control and spreads to your neighbor’s house, you’d be grateful for an umbrella policy that would pay, up to its limits, for the damage to the neighbor’s house that is beyond the limits of your home insurance liability coverage.
Other Types of Insurance
Other types of insurance that you may have in addition to or instead of auto and home insurance that umbrella insurance could also supplement:
- Boat insurance or watercraft insurance
- Condo insurance
- Motorcycle insurance
- Recreational vehicles insurance
- Renters insurance
How To Get Umbrella Insurance
Before buying your umbrella policy there are steps to take to ensure you get the right coverage and the best umbrella insurance costs.
Decide on Coverage Limits
To decide what umbrella insurance limits to choose, evaluate your assets and determine your net worth. This includes property like your home, car and possibly ATV, boat or motorcycle, and financial assets like income, investments and savings accounts.
Umbrella insurance policies start at a $1 million limit and go up from there. If your net worth is over $1 million, you’d want a policy that covers what you could possibly lose in a lawsuit. You will need higher limits, perhaps $5 million or $10 million if you own multiple high-valued properties or rental units. Chubb offers a policy of up to $100 million if your personal wealth is that high and you need the coverage.
Gather Information
Once you know how much liability insurance you want, have information you’ll need to get quotes. Information that will be handy for shopping for the best umbrella insurance includes:
- Details about the home you own.
- Details of other property you own, such as vacation homes, cars, boats, motorcycles or recreational vehicles.
- Details of any business or farming activities that take place on your property.
- Details of any past home or auto insurance claims.
- Information on the residents of your home (such as ages, occupations and driving record information, like tickets or accidents in recent years).
- Whether you currently have home and auto insurance policies and if so the limits you have.
Comparison Shopping for the Best Umbrella Insurance Companies
If you have your home and auto insurance policies with the same company, start shopping with that insurer and see if you can beat that price elsewhere. If you have separate insurance companies for your home and auto, compare umbrella insurance quotes with each.
It’s common for insurance companies to require you to have a minimum amount of liability insurance to be eligible to buy umbrella insurance. For example, car insurance liability limits of at least $250,000 per person, $500,000 per accident for bodily injury and $100,000 for property damage, and home insurance liability limits of at least $300,000.
Once you have prices from your current insurance companies, comparison shop with a few other insurers to see which offers the best umbrella insurance rates plus rates for your base policy. You’ll usually get a bundling discount if you have two or more policies with one insurance company.
It’s wise to price out the cost of auto, home and umbrella policies with all the companies to see if a bundled package would give you the best overall rate.
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Is it Worth Having Umbrella Insurance?
It’s likely worth having umbrella insurance if you own a house and have decent savings, rental property or other significant assets that could be at risk if there’s a substantial lawsuit judgment against you. Calculate your net worth, or what can be taken from you in a lawsuit, to decide if having umbrella insurance is worth it for your situation.
You don’t need to be wealthy to have assets you want to protect and future earnings you’d like to defend. You may just want peace of mind that you have coverage to pay out if you have a large claim or lawsuit against you.
Best Umbrella Insurance Frequently Asked Questions
How much does umbrella insurance cost?
Umbrella insurance costs an average of $383 a year for a $1 million policy, according to ACE Private Risk Services. That is for a household with one home, two cars and two drivers. The level of risk you have affects the cost of umbrella insurance. A family with three houses, four cars with three drivers (one under age 25) and one boat poses more risk and costs an average of $563 per year for a $1 million umbrella policy on average, according to ACE.
Does umbrella insurance cover multiple properties?
Yes, an umbrella insurance policy can cover multiple properties that you own. Unlike a home insurance policy that is for one property, an umbrella insurance policy usually extends coverage to multiple homes or rental properties that you own.
Check with your umbrella insurance company to see if it has a property limit, as some insurers restrict how many properties one umbrella policy can cover.
How much umbrella insurance do I need?
To determine how much umbrella insurance you need, estimate the total value of your assets—property, savings, investments, etc.—to determine your net worth. You’ll then want to buy adequate umbrella insurance to cover what you could possibly lose in a lawsuit.
Umbrella insurance limits vary by company but many offer limits up to $5 million or $10 million. Look for commercial umbrella insurance if you have a business.
