McKayla Girardin, Car Insurance Writer
An umbrella limit in insurance is the amount of money an umbrella insurance policy will cover beyond the limits of the underlying insurance (such as auto insurance or homeowners insurance). Umbrella insurance limits start at $1 million but can be as high as $10 million, depending on the policyholder’s needs.
Required Minimum Limits for Umbrella Insurance
In order to qualify for an umbrella insurance policy, your underlying coverage, such as home or auto insurance, may need to have the highest limits available. For example, Geico requires policyholders to carry $300,000 in bodily injury liability auto insurance per person ($300,000 per accident) and $100,000 in property damage liability auto insurance before they can be eligible for an umbrella policy.
Limits to Umbrella Insurance Coverage
Umbrella insurance will not cover your own bodily injuries or property damage after an accident, and coverage won’t kick in until your underlying policy is maxed out. For example, if you have a car insurance policy with a $100,000 limit for property damage liability, your umbrella insurance cannot be used to pay for another driver’s property repair costs until that $100,000 limit is exhausted.
Umbrella insurance can help cover expenses for others if you are at fault for an incident that costs more than your underlying insurance policy will cover. It can also cover things like legal costs in the case of libel or slander, liabilities when traveling overseas, and expenses related to your own psychological harm and mental anguish.
To learn more, check out WalletHub’s guide to umbrella insurance.
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