Personal Umbrella
Excess Liability Coverage
A personal umbrella policy adds $1M to $5M or more in liability coverage above your home and auto limits — at a cost that is remarkably low relative to the protection it provides. For business owners who have built personal wealth, an umbrella is among the most important and cost-effective coverage decisions in the entire personal insurance program.
Personal Umbrella
What You Need to Know About Excess Liability Coverage
Cost Per Million
A $1M personal umbrella policy typically costs $150–$350 per year. A $2M umbrella costs only marginally more. Compared to the cost of a $1M judgment without coverage, the premium is trivially small — making an umbrella the highest-value-per-dollar purchase in most personal insurance portfolios.
Triggers at Underlying Limit Exhaustion
The umbrella attaches when an underlying policy limit is exhausted. If your auto policy pays its $300,000 limit on a serious accident claim, the umbrella picks up the next $1M — before your personal assets are reached. This is the core protection the umbrella provides.
Right-Sizing the Limit
The appropriate umbrella limit is roughly equal to your total personal net worth — what a plaintiff could reach in a judgment against you personally. Business owners with significant equity, real estate, and investment accounts should carry $2M–$5M to match their actual asset exposure.