What Is Umbrella Insurance and Who Needs It?
Umbrella insurance pays liability claims that exceed the limits of your auto, homeowners or renters policies — for example, after a serious car accident or an injury on your property. Policies commonly start at $1 million in coverage and often cost a few hundred dollars a year. It's especially worth considering if you have significant assets, a teen driver, a pool or a dog.
On this page
Liability lawsuits can exceed standard policy limits quickly. Umbrella insurance protects your savings and future income when that happens.
How it works
| Example | Amount |
|---|---|
| Court judgment after an accident you caused | $800,000 |
| Auto liability limit | $300,000 |
| Umbrella pays | $500,000 |
Insurers usually require you to carry certain minimum liability limits on your auto and home policies first.
What it covers
- Bodily injury and property damage you cause to others
- Certain personal liability such as libel or slander, depending on the policy
- Legal defense costs
Who should consider it
- Homeowners with significant equity or savings
- Families with teen drivers
- Owners of pools, trampolines or dogs
- Landlords
- People with a public profile or active social media presence
Insurance protects what you've built — keep growing it:
Compound Interest CalculatorSee how your savings grow over timeTry the calculator →Frequently asked questions
Does umbrella insurance cover my own injuries or property?
No. It covers liability to others. Your own losses are covered by your auto, home and health insurance.
Do renters need umbrella insurance?
Renters with significant assets or income can benefit too. Many insurers offer it alongside renters insurance.