When a claim exceeds the limit of your home or auto liability insurance, personal liability coverage with an umbrella insurance policy can help cover the rest.
Article: 5 minutes
Updated: September 30, 2026 Published: November 8, 2021
By: USAA Reviewed by: Editorial contributors
Umbrella insurance provides an extra layer of liability protection beyond the limits of homeowners, auto or renters insurance policies. This additional coverage can safeguard personal assets and future wages from claims that exceed standard policy limits, as well as cover certain liabilities not typically included in other policies.
Legal responsibility is a tricky thing. Whether you're at fault for an auto accident or someone is injured on your property, you can be held responsible for other people's medical expenses, pain and suffering, property damage and even lost wages. And here's the thing: You don't have to be a millionaire to get sued like one.
That's why liability coverage is such a vital part of your homeowners or auto insurance policy.
The truth is, anyone can get hit with a costly lawsuit, regardless of age or income. And if you're found liable for damages, more than your savings could be at risk. Your property, investments and even future wages could be on the line if damages exceed the amount covered by your homeowners or auto liability insurance.
Learn how an umbrella insurance policy can protect you, your loved ones and your finances from the potentially devastating impact of a liability claim.
Video Duration: 2 minutes 3 seconds
Getting an umbrella policy for enough liability protection just makes sense.
You carry an umbrella to protect yourself from the rain. Why not carry umbrella insurance to help protect yourself from costly liability claims and lawsuits?
Major liability can arise earlier than you might think. Claims exceed auto, homeowners, renters, rental property and watercraft personal liability coverage every day, leaving individuals responsible to pay for the remainder of the claim.
For instance, let's say a family member causes an accident that results in multiple injuries, someone slips and falls at your home, an excited dog jumps on someone or an incident happens away from your property, while boating, driving a golf cart or ATV. An Umbrella policy provides broad protection and protects you worldwide, wherever you go.
You can be held responsible for other peoples' medical expenses, long-term rehabilitation, pain and suffering, property damage and lost wages. After you reach your primary policy limits, umbrella insurance picks up where those policies leave off.
Anyone can get sued. Don't have much? Don't earn much? It doesn't matter. If you're found liable for damages, you could lose what you do have including things you own, savings and future wages.
Umbrella insurance is relatively inexpensive. You can get $1 million of coverage for about $1 a day on average. Of course, the amount you pay will depend on your situation and the amount of coverage you need.
Still don't think you need umbrella insurance? A good starting point is to have enough liability protection to cover your net worth, everything that you own minus everything you owe. If your net worth exceeds your limits on your auto and home insurance, we recommend getting an umbrella policy.
So the next time you think about umbrellas, think about your finances and your future. An umbrella policy is protection when you need it.
Description of visual information: [The information contained is provided for informational purposes only and is not intended to represent.
USAA means United Services Automobile Association and its affiliates.
5995913] End of description.
A personal umbrella policy, or PUP, offers extra liability coverage beyond the limits of your homeowners insurance. It can also provide additional protection for your auto insurance policy. And it can offer broader protection for liability and other risks on your renters insurance. After you reach the limits of other policies, umbrella insurance kicks in so you don't have to pay for additional damages out of pocket.
Umbrella coverage also can protect you against other types of claims such as libel, slander and invasion of privacy, which aren't covered by your home or auto policy.
Majority liability can arise more easily than you might think. Let's say you crash into and total a $100,000 sports car driven by a heart surgeon who, as a result, can't go back to work. Or maybe there's a pool accident at your house. Or your dog bites someone. Things happen, and they can get very expensive, even exceeding your auto or homeowners insurance coverage limits.
Adding umbrella coverage can provide a higher level of protection for your assets and wages — as well as any loved ones in your household.
A good rule of thumb is to have enough liability protection to cover your net worth, which is everything you own minus everything you owe. If your net worth exceeds your limits on your auto and home insurance, it might be time for an umbrella policy.
A claim can exceed the limits of your home and auto liability coverage. Personal umbrella insurance can help pay the rest. It may even cover legal fees in the event of a lawsuit.
Umbrella policies typically offer four general categories of coverage:
Let's say you're traveling on the highway when you suddenly realize that the traffic ahead of you has slowed down. Unfortunately, you notice too late and cause a five-car pile-up.
Your auto policy has bodily injury limits of $300,000 per person and $500,000 per accident, plus $100,000 in property damage liability. But it's still not enough to cover the total medical expenses for the 10 people injured in the accident. There are costly auto repairs, too. Plus, what if one of those people decides to sue you for lost wages or mental anguish?
Without an umbrella policy, you'd likely have to cover the additional damages, which could add up quickly.
A similar situation could play out at your home or rental property. Someone could slip on ice on your walkway and rack up enormous medical bills. If those bills go above and beyond the coverage limit of your homeowners or rental property policy, an umbrella policy could help cover the rest.
Or what if you or someone in your household posted a negative online review of a local restaurant? If the business owner felt the review harmed their revenue, they could initiate a costly lawsuit that your other insurance wouldn't cover.
Since the boundaries of umbrella coverage can be a bit unclear, it's also helpful to know what isn't covered. Here are a few examples:
Some insurers may require you to purchase a certain amount of liability coverage on your underlying policies before they'll sell you an umbrella policy. The typical requirement is about $250,000 of auto liability coverage and $300,000 of liability insurance on your property policy, according to the Insurance Information Institute.
The amount you pay for a policy will depend on your financial situation and the amount of coverage you need.
To determine the right amount of umbrella coverage, you'll want to consider your income, assets and your potential exposure to risk. For example, if you have a lot of assets to protect or a high chance of being sued, you may want the extra protection that umbrella insurance provides.
The decision to purchase umbrella insurance is up to you. For many people, it can provide great peace of mind to know that their family has a more secure financial future.
Umbrella insurance provides extra liability coverage that can help protect your family and finances.