How much does umbrella insurance cost?

No, an umbrella policy is not a waste of money for people with more than $500,000 in assets. Umbrella policies provide liability coverage beyond the limits of another insurance policy, and even if a policyholder never files an umbrella claim, the low cost of coverage is usually worth the added financial protection.... read full answer

Most auto insurance policies only provide up to $500,000 in liability coverage, and a good rule of thumb is to make sure you have enough liability insurance to cover your assets. So, if your net worth is $1 million, for example, then you should purchase an umbrella policy, which only costs an average of $150-$300 annually.

On the other hand, umbrella insurance is generally not a good investment for individuals without many assets. Their car, home, or renters insurance probably provides enough coverage already.

For more information, check out WalletHub’s complete guide to umbrella insurance.

A $5 million umbrella policy costs around $375 to $525 per year, on average. Every policyholder’s umbrella insurance premium will vary based on their personal risk factors, so individuals who own more cars or properties will be more expensive to insure, as will people who are particularly likely to be sued.... read full answer

Average Umbrella Policy Costs

• $5 million umbrella policy: $375 - $525 per year
• $4 million umbrella policy: $325 - $475 per year
• $3 million umbrella policy: $275 - $425 per year
• $2 million umbrella policy: $225 - $375 per year
• $1 million umbrella policy: $150 - $300 per year

Umbrella insurance applies after the liability limits on another policy, such as a homeowners or auto insurance policy, have been exhausted. Most umbrella policies also cover claims for things like slander and libel. But since umbrella claims are infrequent, coverage is generally inexpensive.

For more information, check out WalletHub’s complete guide to umbrella insurance.

You need an umbrella policy if your total assets exceed your car or home insurance policy limits or if you have a high risk of being sued. An umbrella policy is an optional form of liability insurance designed to supplement existing coverage, and it typically costs $150 to $200 annually for $1 million in coverage. As a result, households with a high net worth are the most likely to need umbrella coverage.... read full answer

When You May Need an Umbrella Policy

• Your assets are greater than your home or car insurance policy limits.
• Your occupation puts you at high-risk for a lawsuit.
• You own a trampoline, hot tub, or swimming pool.
• You ski, hunt, surf, or participate in another hobby where you could injure someone else.
• You own property, especially rental or investment properties.
• You have a dog with a restricted breed or a bite history.
• You are a public figure.
• You own guns.
• You frequently host guests.

A common rule of thumb is that households should have an umbrella policy if they have $1 million or more in assets. Umbrella policies are also a good investment for people whose assets will likely increase considerably in the future, as liability settlements can sometimes result in wage garnishment. For example, medical students are often advised to purchase umbrella coverage to protect their future income.

To purchase an umbrella policy, you will usually need a car insurance policy with high liability limits. For instance, Geico umbrella coverage requires at least $300,000 in bodily injury liability insurance and $100,000 in property damage liability coverage.

For more information, check out WalletHub’s complete guide to umbrella insurance.