Umbrella Insurance — What It Covers & What It Costs

Umbrella insurance provides an extra layer of liability protection beyond the limits of your auto, home, or other underlying insurance policies. It kicks in when a claim exceeds your standard policy limits, protecting your savings, home equity, investments, and future earnings from a catastrophic lawsuit.

Most umbrella policies start at $1 million in coverage and are available in $1 million increments. Despite the high coverage amounts, umbrella insurance is surprisingly affordable — typically $150–$400 per year for $1 million in coverage — because it only pays after your underlying policies are exhausted.

Umbrella coverage is broader than standard liability insurance. In addition to covering excess auto and home liability claims, it can protect against claims like defamation, slander, libel, and invasion of privacy that may not be covered by your other policies. Anyone with assets to protect, especially homeowners and drivers with newer vehicles, should consider umbrella coverage.