If you have valuable assets you want to protect against liability claims in court, an umbrella policy adds extra protection. If you have a large net worth — $1 million or more — you may want to consider purchasing an umbrella policy. Most basic home and auto liability policies do not offer more than $500,000 in liability coverage, but umbrella coverage usually begins at a limit of $1 million and can go up to $10 million or more. Likewise, personal injury liability lawsuits can award settlements of $1 million or more.
The Insurance Information Institute estimates a $1 million umbrella policy costs between $150 and $400 per year. To purchase an umbrella policy, you must meet coverage requirements. In other words, you can’t have the bare minimum of liability limits on an underlying policy (home or auto) and expect to purchase additional umbrella coverage.
