Free tool
Umbrella Insurance Calculator
For the accident that costs more than your policy pays.
Umbrella to consider
$1,000,000
$1,000,000 of your $1,500,000 is beyond your current limit.
- Assets
- $900,000
- Future income$120,000 for 5 years
- $600,000
- At risk
- $1,500,000
- Your liability limit
- $500,000
- Not covered
- $1,000,000
- Umbrella to considerSold in steps of one million
- $1,000,000
Insurers ask for minimum liability limits on your auto and home policies before they sell an umbrella. Some states protect retirement accounts and part of home equity.
A teenager borrows the car and causes a serious crash; the claim runs past the auto policy's limit. This free InsureCard calculator adds up what a lawsuit could reach, your assets and future income, takes off the liability limit you already carry, and rounds the rest up to the umbrella policy that would cover it.
Updated
The formula
At risk = assets + yearly income × years
Not covered = At risk − liability limit you have
Umbrella = Not covered, rounded up to the next $1,000,000
Assets are what a judgment could reach: home equity, savings and investments. Future income counts because a court can take part of future pay. Some states protect retirement accounts and part of a home's value, so check yours.
Personal umbrella policies are sold in steps of one million, so the result is rounded up.
A worked example: $900,000 of assets
A household has $900,000 in home equity and savings and earns $120,000 a year. Counting 5 years of income, $1,500,000 is at risk.
Their auto policy's liability limit is $500,000, which leaves $1,000,000 uncovered. The umbrella to consider is $1,000,000.
What an umbrella policy costs
The Insurance Information Institute puts the cost of an umbrella policy at generally $200 to $350 a year for an extra $1 million of liability protection, and says coverage usually ranges from $1 million to $10 million.
It pays once the limit of your auto or home policy is used up, and it covers broad types of liability, from a dog bite to a guest's fall.
What insurers ask for first
An umbrella sits over your auto and home policies, and insurers set minimum liability limits on them before they will sell one. Raising those limits can be part of the cost.
A personal umbrella may not cover liability from a business you run, unless the policies under it do.
Questions
How much umbrella insurance do I need?
Enough to cover what a lawsuit could reach beyond your current liability limit: your assets plus the future income a court could take. Round up to the next million, since umbrella policies are sold in steps of one million.
Who needs umbrella insurance?
Anyone with assets or income worth protecting, and especially households with teenage drivers, a pool, a dog, rental property or a public profile. A serious accident claim can run well past the limits of a standard policy.
Does umbrella insurance cover my own injuries or car?
No. It covers your liability to other people: injuries you cause and damage to their property. Your own car, home and injuries are covered, if at all, by your other policies.