When should you get 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.

A $1 million umbrella policy costs around $150 to $300 per year, with the cost increasing a small amount for every additional million. As with any insurance policy, your exact price will depend on individual risk factors, including the number of people in your household and how many cars and properties you own.… read full answer

A $2 million umbrella policy will cost about $75 more than a $1 million policy, by the way. Every additional million in coverage after that will add about $50 to the total cost.

Umbrella insurance provides liability coverage beyond the limits of an auto or personal property policy. For instance, policyholders can file an umbrella insurance claim if they are at-fault in a car accident that causes damage beyond their car insurance limits. Most umbrella policies also cover claims for things like libel, slander, and accidents that occur abroad.

To learn more, check out WalletHub’s complete guide to umbrella insurance.

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 … read full answernot cover claims that are excluded outright from liability insurance, such as intentional damage or damage to your own property.

What Umbrella Insurance Covers

• Liability in excess of auto/home insurance policy limits
• Libel and slander
• Malicious prosecution
• Psychological harm and mental anguish
• Legal defense costs related to liability claims
• Liabilities when traveling overseas
• False arrest

Umbrella insurance is typically recommended for individuals who have a high net-worth that can’t be covered by a standard liability policy. To learn more, check out WalletHub’s guide to umbrella insurance.