Umbrella Insurance: How Much Coverage Should You Buy?

by | Oct 19, 2023 | Umbrella Insurance


Umbrella insurance, what is it, and why do you need it? Let’s say you crash your vehicle into someone else’s vehicle while you are driving, and your auto insurance policy won’t cover the full amount of damages or injuries incurred in the accident. This is where having an umbrella insurance policy can be beneficial.

Now the question is, how much umbrella insurance do you need to cover extra costs or further protect your assets? If you are wondering how much umbrella insurance you need, you’ve come to the right place.

What is Umbrella Insurance?

Umbrella insurance acts as an extra layer of coverage beyond the liability limits of your standard insurance policies. This additional coverage can be applied to homeowner’s, auto, or watercraft insurance policies that you already have.

For example, if you have $500,000 in home liability coverage but are sued for $1 million, your umbrella policy could cover the additional $500,000.

What Umbrella Insurance Policies Cover

Umbrella insurance policies often cover property damage, bodily injury, and personal injury, including invasion of privacy and defamation of character. Here are some examples of how such a policy can protect you and your assets.

Lawsuit Protection

In the event that someone files a personal lawsuit against you and you’re found liable for damages such as bodily injury, slander, defamation of character, or libel, having an umbrella policy can help save you money when it comes to covering the costs of these legal proceedings.

Injury on Your Property

If someone gets injured while on your personal property, you may be held responsible for costs exceeding your liability limit. An umbrella insurance policy can step in to cover these excess expenses.

International Incidents

If you are overseas and an unforeseen incident occurs while you are there, your standard insurance policy may not extend coverage because you are abroad. Your umbrella policy can cover these unexpected costs while you are abroad.

Determining Your Umbrella Coverage Needs

To know how much umbrella coverage you need, you must already have liability insurance for all your property and assets. Only then can you determine the amount of umbrella coverage you need.

To do this, tally up the total value of your assets – this includes your home, other properties, investments, bank accounts, and any potential loss of income. Next, subtract any debts you owe to get your net worth. Now compare this net worth amount to the liability coverage from your existing insurance policies. If your net worth exceeds your current liability limits, umbrella insurance can bridge the gap.

Insurance companies will typically sell umbrella insurance coverage policies in one-million-dollar increments. Another great thing about umbrella insurance coverage is that some policies also allow you to extend coverage to your family members.

How To Get Umbrella Insurance

If you want to purchase an umbrella insurance policy, you can contact your insurance agent to see how much the costs are and to determine whether an umbrella policy is necessary for your situation. If you need assistance finding out if you need umbrella insurance or help with any other insurance-related inquiries, please feel free to contact us.

Read also: Do I Need Umbrella Insurance?

Get in Touch with Your Trusted Local Insurance Agency

Now that you understand and have read through what umbrella insurance is and how much coverage you may need, here at TSL Insurance Group, we can help you add umbrella insurance coverage to your existing policies.

We are the best insurance agency in Baton Rouge, LA, with 50+ years of experience. Schedule a complimentary consultation over the phone or in person at one of our offices in Baton Rouge, Lafayette, Lutcher, Abbeville, or Franklin. Our knowledgeable agents will review your current policies, discuss any gaps in your coverage, and provide recommendations.

It is really that easy to get an umbrella insurance policy that can cover almost any situation with the help of the team at TSL Insurance Group.