How Much Umbrella Insurance Do I Need?
Use our calculator to determine how much umbrella insurance is right for you.

Rachael Green
An umbrella insurance policy provides additional coverage outside the existing limits of other policies, such as car insurance and home insurance.
If you get sued after a car accident or that "friend of a friend" slips and falls at your pool party, the liability coverage including in your home or car insurance will cover the legal fees and any money the court orders you to pay to the injured party.
But standard insurance policies typically have coverage limits of around $250,000 to $300,000. In a lawsuit in which the fees and damages you must pay exceed that limit, you'd be on the hook for everything above that coverage limit.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Standard policies also might have limits on when and where they'll cover you. If you're sued for libel or get into a car accident abroad, for example, the liability coverage included in your home or car insurance might not cover you.
Umbrella insurance kicks in when the underlying liability limit of an insurance policy is reached. Whether you need this supplemental coverage depends mainly on your net worth and your risk yof being sued (you might be more at risk than you think).
Here's what you need to know about umbrella insurance and how to determine how much you need.
How much does umbrella insurance cost?
Umbrella insurance is usually sold in increments of $1 million, up to $5 million. To buy it, you'll need to already have a minimum level of home and auto liability coverage, typically, $250,000 for auto insurance and $300,000 for homeowners insurance.
The cost of umbrella insurance can range anywhere from $200 per year on the low end to more than $1,000, according to Trusted Choice, with an average cost of about $380 per year to get $1 million to $2 million of protection. However, the amount you'll pay for umbrella insurance depends on several factors, such as where you live, how much coverage you buy and your risk profile.
To determine how much your umbrella policy will cost, Trusted Choice advises individuals to assess their net worth, review their risk of becoming the target of a lawsuit and choose an appropriate amount of coverage, which "should be at least equal to your net worth."
You can also use this calculator to assess how much coverage you need.
What does umbrella insurance cover?
Most umbrella insurance policies offer coverage for the following:
- Bodily injury: Umbrella insurance can help cover the cost of medical bills and/or liability claims for injuries to another person, whether it's from an at-fault auto accident or an accident in your home (guest falling, dog bite, etc.).
- Property damage: Umbrella insurance can help cover loss or damage you cause to another's property if the damage exceeds your underlying policy limits.
- Lawsuits: If you are involved in a lawsuit for slander, libel, defamation of character and/or other personal attacks, umbrella insurance can provide coverage for legal expenses.
- Landlord liability: If you own a rental unit, umbrella insurance can help cover liability claims you might experience as a landlord, such as if a tenant trips on the property, gets injured and sues. If your landlord policy reaches its limit, umbrella insurance can provide additional coverage.
How to buy umbrella insurance
If you buy your home and auto insurance from the same insurer, you'll typically get a discount of 10% to 15% on your annual premiums, and you might get an additional discount on the umbrella policy, as well. You can offset at least some of the umbrella premium by taking larger deductibles on your auto and home insurance policies.
With a single insurer, your coverage is less likely to fall through the cracks if the requirements for the umbrella policy change. If you're sued, you'll have one set of defense lawyers for the entire case. Otherwise, agents advise you to buy the umbrella policy from your auto insurer, because most large lawsuits involve auto accidents.
If your current home or auto insurer won’t sell you an umbrella policy — because your dog's breed is classified as potentially dangerous, for example — ask an independent agent who represents multiple insurers to help you find a stand-alone umbrella policy.
Do I need umbrella insurance?
One quick way to tell if you need umbrella insurance is to calculate your net worth. If the total value of your savings, investments, home equity and other assets is higher than the maximum amount of liability coverage your home or car insurance will offer, you want to look into supplementing that with additional liability coverage.
Progressive advises individuals whose net worth exceeds their maximum liability coverage via their standard insurance policies to open an umbrella policy to avoid any negative financial repercussions.
You might also want to look into umbrella insurance if you're at higher risk of being sued. Never thought of yourself as a target for a lawsuit? You might be surprised at the activities and lifestyle factors that can put you at higher risk of being sued.
According to the Insurance Information Institute (III), those risk factors include things such as:
- Owning a swimming pool and having pool parties
- Renting out a property you own
- Having a dog or a teenage driver in the house
You should also consider opening an umbrella policy if you:
- Are a landlord
- Own property
- Have significant savings or other assets
- Want protection for liability claims against you when traveling outside the U.S.
- Coach kids’ sports
- Often host parties in your home
- Take part in sports in which you could easily injure others — hunting, skiing or surfing
- Are a public figure
- Own watercraft or recreational vehicles
Choosing the right umbrella insurance coverage
Umbrella insurance can help protect your assets if claims exceed your insurance policy limits. This extra coverage can give you peace of mind and often makes sense if your income exceeds your liability coverage, or if you have high-risk situations, such as owning a dog or a swimming pool.
You can buy a liability insurance policy through your home insurer or an independent agent, and you can choose the amount of coverage you want.
Purchasing an umbrella insurance policy can be a helpful way to ensure you’re fully protected if the unexpected happens.
Get more insurance tips and other personal finance insights straight to your inbox. Subscribe to our daily newsletter, A Step Ahead.
Related Content
- How and When to Switch Home Insurance for the Best Coverage at the Best Price
- Eight Surprising Things Your Home Insurance Won't Cover
- 10 Things You Should Know About Life Insurance
- 8 Ways Seniors Can Save on Car Insurance
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.
- Rachael GreenPersonal finance eCommerce writer
-
A Nasty Surprise Awaits Snowbirds: Thousands in Unexpected Bills
Before leaving your home for the winter, remember to do this one thing, or else you might face an expensive repair bill upon return.
-
Savings Goal Calculator
Tools Want to know how much you need to save each month to reach your financial goals? Our calculator helps you build a realistic savings plan.
-
Help! My Car Was Totaled. Should I Repair and Keep Driving It or Buy a New One?
Does it ever make sense to keep a totaled car? Maybe, but you need to consider these factors first.
-
Are Rideshare Drivers on the Road to Financial Ruin?
Being a rideshare driver can be a great way to meet people and make money. But overlooking this one thing could cost you thousands.
-
My Car Is 10 Years Old. Should I Drop Down to Minimum Coverage on My Car Insurance?
Reducing your car insurance to minimum coverage could save you thousands on premiums. But when is it worth the risk?
-
Google's AI Overview Is Wrong About Life Insurance 57% of the Time, Says Study
You need more than a grain of salt when getting life insurance tips from Google's AI overview.
-
Are You an Auto Theft Target? Discover the Clues
Thieves seized more than 850,000 cars last year. See which models, states and behaviors draw the eyes of opportunists.
-
Spot Heat Exhaustion in Your Pet Before It Costs Them — and You
Heat strokes aren't just for humans. The signs of heat exhaustion in pets can be harder to spot, but just as deadly.