insurance

Protect Your Assets With an Umbrella Insurance Policy

A $1 million policy can cost as little as $150 per year.

Who should think about getting an umbrella liability insurance policy, and how much does it cost? --J.S., Phoenix

CALCULATOR: How Much Umbrella Insurance Do I Need?

Most people with income, property and some savings should consider getting an umbrella policy of at least $1 million, which can protect your assets and future earnings from lawsuits. “An umbrella liability policy is one of the most overlooked but important ways to limit your financial risk,” says Mari Adam, a certified financial planner in Boca Raton, Fla. The coverage kicks in if you injure someone or cause property damage and are sued for more than the liability limits on your homeowners or car insurance.

A $1 million policy can cost as little as $150 per year if you have a home, two cars and no other major risks, says Sarah Brown, an independent insurance agent in Shrewsbury, Pa. “The more exposures you have—more cars, a motorcycle, a boat, young drivers, etc.—the higher your premium,” says Brown. Before you can add an umbrella, you must usually have at least $500,000 in liability coverage on your home and car insurance, which will pay out first.

If you have more than $1 million in assets, consider a larger policy. Doubling the coverage generally won’t double the premiums, says Brown.

Most Popular

In What Order Should You Tap Your Retirement Funds?
retirement planning

In What Order Should You Tap Your Retirement Funds?

Should you go with your IRA first or your brokerage account? Pulling money haphazardly can have negative implications. Instead follow this road map fo…
June 28, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
An Easy Way to Find How Much You Will Spend in Retirement
retirement planning

An Easy Way to Find How Much You Will Spend in Retirement

One simple math equation can help you determine where to start building your retirement income plan, and whether your money should last.
June 27, 2022

Recommended

Homeowners Insurance: How to Protect Your Home
Brandon Copeland

Homeowners Insurance: How to Protect Your Home

NFL linebacker and Kiplinger contributing editor Brandon Copeland discusses the ins and outs of homeowners insurance.
June 8, 2022
Short-Term Insurance Plans' Good, Bad and Ugly
retirement

Short-Term Insurance Plans' Good, Bad and Ugly

You'll need a clear-eyed analysis to gauge the value of short-term care insurance plans and if they're right for you.
May 26, 2022
Things You’ll Regret Keeping in a Safe Deposit Box
savings

Things You’ll Regret Keeping in a Safe Deposit Box

Locking up certain important documents and valuables in a bank vault could turn into a headache for you or your heirs.
May 18, 2022
7 Things Medicare Doesn’t Cover
Healthy Living on a Budget

7 Things Medicare Doesn’t Cover

Medicare Part A and Part B leave some pretty significant gaps in your health-care coverage. But Medicare Advantage has problems, too.
May 4, 2022