What Is Umbrella Insurance?
Umbrella insurance is extra liability coverage that kicks in when your auto or home insurance limits are exhausted. If you're sued for $1.5 million and your auto policy only covers $300,000, your umbrella policy covers the remaining $1.2 million — protecting your savings, investments, and future earnings.
Who Needs Umbrella Insurance?
Anyone with significant assets to protect. As a rule of thumb, your umbrella coverage should at least equal your net worth. The more you own, the more you have to lose in a lawsuit. High-risk factors that increase your need: owning a pool, having teen drivers, owning rental property, owning aggressive dog breeds, or frequently hosting guests.
How Much Does It Cost?
Umbrella insurance is one of the best values in insurance. A $1 million policy typically costs $150–$300 per year. Each additional $1 million adds roughly $50–$75 per year. For the protection it provides, it's remarkably affordable.