Umbrella Insurance
Extra liability protection beyond your existing policy limits.
Typical cost: $150 – $500 per year
What Is Umbrella Insurance?
Umbrella insurance is a type of personal liability coverage that goes beyond the limits of your homeowners, auto, or watercraft insurance. It kicks in when the liability limits on those policies have been exhausted, providing an additional layer of financial protection against major claims and lawsuits.
Why You Need Umbrella Insurance
If you're found liable for a serious car accident, a guest's injury at your home, or a defamation lawsuit, the costs can easily exceed your standard policy limits. A $1 million umbrella policy typically costs just $150-$300 per year—remarkably affordable for the protection it provides. Most financial advisors recommend umbrella coverage equal to your net worth.
What It Covers
Umbrella insurance covers bodily injury and property damage liability, personal liability situations like defamation and false arrest claims, landlord liability, and legal defense costs. It does not cover your own injuries, your own property damage, or intentional acts.
What's covered
Excess Liability
Extends coverage beyond your auto, home, and boat policy liability limits—typically in $1 million increments.
Bodily Injury
Covers injury claims from auto accidents, slip-and-falls, dog bites, and other incidents where you are liable.
Property Damage
Pays for damage you cause to others' property beyond your base policy limits.
Personal Injury
Covers defamation, libel, slander, false arrest, and invasion of privacy claims.
Legal Defense Costs
Pays attorney fees, court costs, and settlement expenses even for frivolous lawsuits.
Worldwide Coverage
Provides liability protection anywhere in the world, not just in the United States.
Pros and cons
Advantages
- Extremely affordable—$1 million in coverage for $150-$300 per year
- Protects assets like savings, investments, and future earnings from lawsuits
- Covers gaps and exclusions in underlying policies
- Legal defense costs are covered even for frivolous claims
- Worldwide liability protection
- Simple to add to existing insurance portfolio
Considerations
- Requires maintaining minimum liability limits on underlying policies
- Does not cover your own injuries or property
- Business-related liabilities are excluded
- Intentional acts and criminal behavior not covered
- Must meet underlying policy requirements to qualify
Frequently asked questions
Related coverage
Protect your home and belongings from damage, theft, and liability.
Affordable coverage for your personal property and liability as a renter.
Comprehensive vehicle coverage including collision, liability, and more.
Coverage for motorcycles including collision, theft, and accessories.
Marine insurance covering watercraft, liability, and on-water accidents.
Protection for recreational vehicles, motorhomes, and travel trailers.
Stay informed
Weekly insurance tips and coverage insights. No spam.