A $2 million umbrella policy costs around $225 to $375 per year, on average. Every policyholder’s umbrella insurance premium will vary based on their personal risk factors, so individuals who own more cars or properties will be more expensive to insure, as will people who are particularly likely to be sued.
Average Umbrella Policy Costs
- $1 million umbrella policy: $150 - $300 per year
- $2 million umbrella policy: $225 - $375 per year
- $3 million umbrella policy: $275 - $425 per year
- $4 million umbrella policy: $325 - $475 per year
- $5 million umbrella policy: $375 - $525 per year
Umbrella insurance applies after the liability limits on another policy, such as a homeowners or auto insurance policy, have been exhausted. Most umbrella policies also cover claims for things like slander and libel. But since umbrella claims are infrequent, coverage is generally inexpensive.
For more information, check out WalletHub’s complete guide to umbrella insurance.
This answer was first published on 07/25/23. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.
FAQs
A $1 million umbrella policy costs around $150 to $300 per year, with the cost increasing by $50 and $75 for every additional million. As with any insurance policy, your exact price will depend on individual risk factors, including the number of people in your household and how many cars and properties you own.
How much should a $2 million dollar umbrella policy cost? ›
The cost of umbrella insurance can range anywhere from $200 on the low end to over $1,000 for a high limit, according to Trusted Choice, with an average cost of about $380 per year providing $1 to $2 million of protection.
How much does a $2 million dollar liability insurance policy cost? ›
On average, an insurance policy that offers coverage for up to $2 million can cost about $30 a month in premiums.
How do I figure out how much umbrella insurance I need? ›
To decide how much umbrella insurance coverage you need, add up the value of your property, savings and investment accounts. Then, take a look at the liability insurance you already have through your existing policies and buy enough umbrella insurance to make up the difference.
What is a good amount for an umbrella policy? ›
The amount of your umbrella insurance policy should match your entire net worth. Umbrella insurance policies begin at $1 million and go up from there in $1 million increments. This might seem like a lot, but when it comes to lawsuits and insurance claims, things can add up fast.
What is a reasonable price for an umbrella? ›
A good umbrella is affordable to anyone, Groux says: You really only have to pay about $30, which is the starting price of Rain or Shine umbrellas. For most people, that's an adjustment. We expect umbrellas to be, if not a couple of dollars, maybe $10 or $15.
What are the disadvantages of umbrella insurance? ›
What are the disadvantages of the umbrella policy? While umbrella insurance offers extensive coverage, it doesn't cover personal injuries or property, business losses, and intentional or criminal acts.
At what net worth should you get an umbrella policy? ›
As a general rule, it's recommended to have umbrella insurance coverage equal to your net worth. For example, if your net worth is $1 million, you should have at least $1 million in umbrella insurance coverage.
What is the rule of thumb for umbrella insurance? ›
The Golden Gauge: Umbrella Insurance Rule of Thumb Explained
Any agent worth their salt should tell you that umbrella policy limits should equal or just exceed your entire net worth. That way, at least theoretically, your assets are secure no matter what.
Is umbrella coverage worth it? ›
Is umbrella insurance worth it? If you have significant assets, it's worth getting an umbrella policy. The liability insurance within your auto and homeowners insurance policies might not be sufficient if you get sued for an incident such as a dog bite, car accident or accidental injury to someone else.
The cost of an umbrella liability policy depends on how much coverage you purchase, the state where you live (insurance rates vary by state) and the risk that insuring you presents to the insurance company. The more homes or cars you own, and the more household members your policy must cover, the more it will cost.
Is state farm umbrella policy worth it? ›
State Farm's umbrella policies are a good choice for customers with a high net worth who want extra coverage for property damage, injuries, and possible lawsuits that could result from various types of incidents.
Do retirees need an umbrella insurance policy? ›
After spending years building up your retirement savings, the last thing you want is for an unexpected catastrophic accident to wipe it all out with one lawsuit. The umbrella liability policy is your key instrument for helping to protect your assets.
At what net worth should you have an umbrella policy? ›
As a general rule, it's recommended to have umbrella insurance coverage equal to your net worth. For example, if your net worth is $1 million, you should have at least $1 million in umbrella insurance coverage.
