A guide to choosing the best umbrella insurance policy

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As a responsible adult, you probably already have a few insurance policies in place, such as home insurance, auto insurance, and health insurance. But have you considered umbrella insurance? This type of policy can provide additional protection in case of a catastrophic event, such as a lawsuit or a major accident. In this guide, we'll go over the basics of umbrella insurance and provide tips for choosing the best policy for your needs.

What is Umbrella Insurance?

Umbrella insurance is a type of liability insurance that provides additional coverage beyond what your other insurance policies offer. It's called "umbrella" insurance because it covers a wide range of situations, like an umbrella that protects you from the rain. Umbrella insurance can cover things like:

  • Legal fees and damages if you're sued for causing an accident or injury
  • Damages or injuries caused by your pets
  • Property damage caused by you or a family member
  • Slander or libel lawsuits

Umbrella insurance is typically sold in increments of $1 million and can cost as little as a few hundred dollars a year. The cost will depend on factors like your assets, your risk factors, and the amount of coverage you need.

Do You Need Umbrella Insurance?

Whether or not you need umbrella insurance depends on your individual circumstances. If you have a lot of assets, such as a high-value home, investments, or savings, you may be more at risk for a lawsuit. If you have a high-risk occupation, like a doctor or lawyer, you may also be more at risk for a lawsuit. Additionally, if you have a lot of people coming in and out of your home, like a nanny or a housekeeper, you may be more at risk for accidents or injuries.

To determine if you need umbrella insurance, consider the following:

  • Do you have a lot of assets that could be at risk in a lawsuit?
  • Do you have a high-risk occupation?
  • Do you have a lot of people coming in and out of your home?
  • Do you frequently host events or parties at your home?
  • Do you have a pool or other potentially dangerous features on your property?

If you answered "yes" to any of these questions, you may want to consider umbrella insurance.

Tips for Choosing the Best Umbrella Insurance Policy

If you've decided that umbrella insurance is right for you, here are some tips for choosing the best policy:

1. Determine How Much Coverage You Need

The amount of coverage you need will depend on your assets and your risk factors. As a general rule, you should have enough coverage to protect all of your assets, plus an additional $1 million to $2 million.

2. Shop Around for Quotes

As with any insurance policy, it's a good idea to shop around for quotes from multiple providers. Be sure to compare the coverage limits, deductibles, and premiums. Keep in mind that the cheapest policy isn't always the best option. Look for a policy that provides adequate coverage and good customer service.

3. Consider the Provider's Reputation

When choosing an insurance provider, it's important to consider their reputation. Look for reviews and ratings from independent sources, like J.D. Power or A.M. Best. You can also check with your state's insurance department to see if the provider has any complaints or disciplinary actions against them.

4. Check for Exclusions and Limitations

Before purchasing an umbrella insurance policy, be sure to read the fine print and check for exclusions and limitations. For example, some policies may not cover certain types of lawsuits or may have limits on coverage for certain types of accidents. Make sure you understand what is and isn't covered by the policy.

5. Bundle Your Policies

Many insurance providers offer discounts if you bundle multiple policies together, such as home insurance, auto insurance, and umbrella insurance. Be sure to ask about discounts when shopping around for quotes. Bundling your policies can save you money and make it easier to manage your insurance coverage.

6. Consider an Independent Insurance Agent

If you're not sure where to start with choosing an umbrella insurance policy, consider working with an independent insurance agent. These agents work with multiple insurance providers and can help you find the best policy for your needs. They can also answer any questions you have about the policy and help you understand the fine print.


Umbrella insurance can provide additional protection and peace of mind in case of a catastrophic event. To choose the best policy for your needs, determine how much coverage you need, shop around for quotes, consider the provider's reputation, check for exclusions and limitations, bundle your policies if possible, and consider working with an independent insurance agent. By following these tips, you can ensure that you have the right coverage to protect your assets and your future.