When to buy an umbrella policy

You might hear that you should purchase umbrella insurance if the total value of your assets, including ordinary checking and savings accounts, retirement and college savings and investment accounts, and home equity is greater than the limits of your auto or homeowner's liability.

When should you get an umbrella policy?

Who needs umbrella insurance? If you have assets and savings you want to protect beyond the maximum liability coverage you're able to purchase via your home or vehicle insurance, umbrella insurance can protect your assets up to $5 million or more, depending on the insurer.

Is it worth getting an umbrella insurance policy?

Umbrella insurance is actually very inexpensive. A $1 million umbrella policy only costs around $150–300 a year. And if you want to bump your coverage up to $2 million, you'll only pay an extra $75 per year. In fact, for each $1 million in coverage you add, you'll only pay an extra $50 a year on average.

How much is $1 million umbrella policy?

The amount of your umbrella insurance policy should match your entire net worth. So if your assets stand at $1 million, bingo. That's how much umbrella insurance you need.