Wondering what is umbrella insurance? Most auto, renters, and homeowners insurance have a liability portion to pay for damages and injuries you cause. If you meet the coverage limits of your policy, umbrella insurance covers the rest of your financial responsibilities.

While umbrella insurance is often associated with wealthy individuals, it’s beneficial for anyonein one of the life stages that affect your insurance needs that includes assets to protect. The cost of a personal umbrella policy is surprisingly affordable, with rates starting at $39 per month.

See umbrella policies explained below, including what they cover. Then, read our umbrella insurance tips to find the right coverage, and enter your ZIP code into our free comparison tool to find the lowest rates.

What You Need to Know

• Umbrella coverage provides liability protection beyond the limits of other policies
• Umbrella insurance covers costs like legal fees, damages, and lawsuits
• Most umbrella policies are affordable, with rates starting at $39 per month

On this page:

• Umbrella Insurance Explained
• Umbrella Insurance Costs
• What Umbrella Insurance Covers
• When You Should Buy Umbrella Insurance
• Best Umbrella Insurance Companies
• Find the Best Umbrella Insurance Policy Today
• FAQs__

Umbrella Insurance Explained

Umbrella insurance is a type of supplemental insurance meant to protect you and your belongings from any large claims that might exceed your coverage limits in your insurance policy. It can also serve to cover any extra liability costs, like a lawsuit, that could potentially occur. If your claim costs go over your coverage limits and you don’t have umbrella insurance, you will be responsible for paying for the rest of the repairs needed, no matter if it was your fault or not.

Umbrella insurance acts as extra liability insurance for you in case anything extreme were to happen, whether it be extensive damages or a lawsuit. Umbrella insurance can be supplemental to both auto and homeowners insurance, and it can be a big help in the event that your claim exceeds the coverage you have on one of those policies. While it's a good choice for an auto policy, most practical guides for understanding homeowners insurance say umbrella is a good idea.

Umbrella Insurance Costs

Several factors affect the price of insurance, and that’s true of umbrella policies. Rates typically start at $39 per month, but the amount of coverage you want and which company you buy from will change how much you pay.

Luckily, getting an umbrella insurance quote is easy. Simply visit the website of a company you’re interested in and fill out their quote request form.

Some companies don’t give umbrella quotes online, so you’ll need to contact them by phone or in person. You should always compare as many quotes as possible before you sign up for a policy to ensure you don’t overpay. If you want to skip the process of filling out multiple quote request forms, you can use an online price-generating tool.

In order to buy a $1 million umbrella insurance policy, most insurance companies will require you have a minimum amount of liability car insurance. You'll also need liability in your homeowners policy. This is because the umbrella insurance won’t kick in until after you’ve exceeded the liability limits on the policy. You’ll typically need $250,000 of liability insurance on your car insurance policy and $300,000 on your homeowners insurance policy.

What Umbrella Insurance Covers

While umbrella insurance picks up where your liability insurance ends, it may cover more than your standard policy. Umbrella insurance generally covers you from the following incidents:

• Liability claims exceeding your standard auto, home, or renters insurance limits
• Legal defense costs, even if you’re not found at fault
• Injuries to others or property damage you cause in certain incidents
• Libel, slander, and defamation claims
• Liability related to rental properties you own

As an example, take a car accident you’re found at fault for that results in $400,000 in injury costs to the other driver and their passengers. $400,000 is how much bodily injury liability is needed to cover your accident.

If you had a $300,000 bodily injury liability limit on your car insurance policy, your auto insurer would cover the first $300,000 but you’d be responsible for the $100,000 difference. If you had an umbrella insurance policy, your umbrella insurance would cover the $100,000 that exceeds your car insurance policy limit.

When You Should Buy Umbrella Insurance

Understanding if you need umbrella insurance might sound difficult, but there are some situations where choosing more liability coverage is an easy choice.

There are several reasons why a person would want to buy an umbrella insurance policy in addition to their homeowners or auto insurance policy. The liability portion of your homeowners insurance only covers up to the limit in your policy, and umbrella insurance provides additional liability coverage.

Umbrella Coverage: What It Is, and When You Might Need It https://t.co/T8Ju4bSIRI pic.twitter.com/0IVXZuiDHS

— Clearsurance (@clearsurance) May 26, 2017

Umbrella insurance for car insurance policies is similar to umbrella insurance for homeowners insurance policies. If you were to get into a car accident that you were found at fault for, you run the risk of being sued for damages and injuries.

Here are a list of reasons you may need to purchase umbrella insurance:

• You have dangerous home items like pools and trampolines.
• You own a dog, especially a breed considered more dangerous.
• You work from home and bring clients on your property.
• You're a well-known public figure or have a higher net worth, which leads to a higher chance of being sued.
• You're worried about being sued for libel or slander.

Umbrella insurance can also help to cover any extra associated costs of a homeowners insurance claim outside of just liability insurance. For example, if your repairs go over your coverage amount, umbrella insurance will kick in and help to cover the rest of the cost, up to your umbrella policy limit.

Best Umbrella Insurance Companies

Now that you’ve seen umbrella coverage explained and have an idea of how much it might cost, it’s time to find the best company for your needs. But how do you choose the best insurance company for your umbrella needs?

A key factor when deciding which company to shop at is how much coverage you can purchase. Most companies cap their limits at $10 million – if you need more, you’ll have to find the right provider. Take a look below to see personal liability insurance policy limits at some of the top umbrella companies.

Insurance Company	Coverage Limit
	$5 million
	$2 million
	$10 million
	$100 million
	$5 million
	$10 million
	$10 million
	$10 million
	$10 million
	$5 million

As you can see, most of the biggest insurance companies offer umbrella coverage for around $10 million. However, people with a high net worth can get umbrella insurance quotes for much higher limits from companies like Chubb.

Find the Best Umbrella Insurance Policy Today

Umbrella insurance is a valuable tool for protecting your assets and financial future from unforeseen, large-scale liability claims. Whether you have substantial assets or simply want extra protection against potential lawsuits and high-risk scenarios, umbrella insurance is a cost-effective way to safeguard what matters most.

Now that you know when you need umbrella insurance, your next step should be finding the best plan for your needs. You can check out Clearsurance’s rankings of best car and home insurance companies to see which one consumers are most happy with before you buy your umbrella insurance policy. You should also enter your ZIP code to compare personalized umbrella quotes in our free tool.

The content on this site is offered only as a public service to the web community and does not constitute solicitation or provision of legal advice. This site should not be used as a substitute for obtaining legal advice from an insurance company or an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. The comments and opinions expressed on this site are of the individual author and may not reflect the opinions of the insurance company or any individual attorney.

FAQs

Do you need umbrella insurance?

Figuring out how much car, home, or renters insurance you need is usally pretty straightforward, but umbrella coverage can be a bit more complicated. You may need umbrella insurance if you have significant assets, high-risk activities, or are concerned about being sued for amounts exceeding your current policy limits.

How does umbrella insurance protect you?

Umbrella insurance protects you by providing additional liability coverage beyond your home, auto, or other insurance policies, covering legal fees, damages, and other costs.

Is umbrella insurance worth it?

With many customers wondering why their car and homeowners insurance rates increase seemingly all the time, it can be hard to justify purchasing another policy. Umbrella insurance can be worth it if you want peace of mind and protection against large, unexpected liability claims that could exceed your existing coverage. Finding affordable umbrella insurance is also relatively easy, especially if you don’t need too much coverage.

What are the disadvantages of umbrella insurance?

The main disadvantages of umbrella insurance include the additional cost of premiums and the fact that it doesn't cover your own injuries or property damage. You can lessen these disadvantages by comparing quotes to find the best umbrella insurance rates - enter your ZIP code to get started.

What does umbrella insurance not cover?

It doesn’t cover your own property damage, intentional acts, or liability related to business activities unless specifically included. Make sure to do a thorough umbrella insurance quote comparison to find the perfect policy for your needs.

Who needs umbrella insurance?

People with significant assets, those at higher risk of lawsuits (e.g., landlords, dog owners), or anyone wanting extra protection beyond basic liability limits should consider umbrella insurance.

Is umbrella insurance expensive?

Umbrella insurance is generally affordable, with the average cost of a 1 million dollar umbrella policy starting at $39 per month. However, you’ll pay higher rates if you want a larger policy limit.

Does umbrella insurance cover lawsuits?

Yes, umbrella insurance covers lawsuits, including legal defense costs and judgments, up to the policy limits. For example, if you have pets and renters insurance, an umbrella policy can protect you from a lawsuit if your animal bites a guest.

In what increments can an insured increase their umbrella limits?

Umbrella insurance limits typically increase in $1 million increments, though it depends on the company that covers you. An insurance representative at your company can give you more information.

Who has the best umbrella insurance?

Companies like Geico, Chubb, and Allstate are often rated highly for umbrella insurance due to their affordable rates, strong customer service, and high coverage limits. Check out our Allstate review to compare one of the most popular umbrella insurance options with other companies.