Do I need umbrella insurance?

When your assets exceed the maximum liability coverage limit on your homeowners or auto insurance, umbrella insurance can offer millions of dollars in extra protection, depending on your policy. Standard homeowners and auto policies typically won’t offer more than $500,000 in liability coverage, which means you may need an umbrella insurance policy to fully protect your assets if your net worth exceeds $500,000. If your total assets are less than the liability coverage limits on your homeowners and auto policies, umbrella insurance may not be as necessary.

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Who needs umbrella insurance?

If you have significant assets to safeguard, umbrella insurance can help protect your wealth in certain worst-case scenarios. An umbrella policy is additional liability protection when you’ve exhausted the liability coverage on your underlying homeowners insurance or auto insurance policies.

Example:You’re at fault in a car accident that seriously injures several people. The bodily injury liability limit on your auto policy is $500,000, but you’re liable for $750,000. Your auto policy may pay up to $500,000 and your umbrella policy could pay the remaining $250,000.

Here are some additional situations that may be covered by umbrella insurance.

  • Injury on your property: Someone is injured at your home and you’re liable for their medical bills. The costs exceed the limit of your personal liability coverage. Umbrella insurance could cover what your homeowners policy doesn’t, up to your umbrella policy’s limits.
  • Dog bite: Coverage for dog bites differs by insurer but, if you're liable for injuries to someone caused by your dog, umbrella insurance may cover an amount that exceeds the personal liability limit on your homeowners policy.
  • Slander, libel, or defamation: A person or business claims you’ve damaged their reputation and brings a civil lawsuit against you—umbrella insurance may provide coverage for what you owe, including the associated legal costs, if you’ve reached the limit of your personal liability coverage.
  • International incidents: Depending on your policy, umbrella insurance may cover incidents that happen abroad, and you’re found liable for, even if your other policies don’t offer coverage for international incidents.

Read more about what umbrella insurance covers.

Is umbrella insurance worth it?

You’ve worked hard to achieve wealth, so it makes sense to safeguard all of your assets—especially when the liability limits on your homeowners and motor vehicles policies don’t offer enough coverage. Because an umbrella policy can offer coverage of up to $5 million with Progressive, umbrella insurance can be crucial if you’re found liable for an amount that exceeds the limits of your other policies.

Learn how to figure out the right amount of umbrella insurance for your household and how much an umbrella policy costs.

When is an umbrella policy a waste of money?

Never underestimate the peace of mind and potentially invaluable protection offered by umbrella insurance. However, if the liability insurance limits on your homeowners, renters, and motor vehicle policies offer enough coverage to protect your assets, then you don’t need umbrella insurance.

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