McKayla Girardin, Car Insurance Writer
@mckayla_girardin
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.
People also ask
What does umbrella insurance cover?
Umbrella insurance covers injuries, property damage, certain lawsuits, and personal liability situations that exceed your home and auto liability coverage. An umbrella policy extends your liability insurance limits and offers protection for situations not covered by a standard liability policy, such as libel or slander.
On the other hand, umbrella insurance does not cover claims that are excluded outright from liability insurance, such as intentional damage or damage to your own property.
What Umbrella...
read full answerHow much umbrella insurance do I need?
You need enough umbrella insurance to make up the difference between your liability insurance limits and your net worth, in order to protect your assets if you are faced with a major liability claim or lawsuit. Umbrella insurance limits usually start at $1 million and can go as high as $10 million, depending on the insurer.
A basic $1 million umbrella policy typically costs between $150 and $300 annually, with each additional $1 million...
read full answerDid we answer your question?