When it comes to insurance, it’s vital to purchase adequate coverage. Understanding your auto and home insurance coverage is essential. You need to know what your insurance company will cover when you’re in an accident, if you’re sued or if a tenant falls on your rental property. Having insurance brings peace of mind, but there are times when your coverage reaches its limits.
That’s where umbrella insurance can provide additional coverage for your needs. Allstate, Geico, Liberty Mutual and Progressive rank among the top companies for these policies. Keep reading to see what other insurers made our list of best companies, who needs this type of insurance and how to purchase it.
- Umbrella insurance policies cost $200-380 annually for $1-5 million in coverage.
- Allstate, Liberty Mutual, Progressive and State Farm offer umbrella insurance policies.
- Umbrella insurance policies are good for people who own specific dog breeds, own a rental property, have a teen driver in their home or own a pool or trampoline.
Compare the best umbrella insurance companies in 2024
AM Best evaluates the creditworthiness and financial strength of more than 16,000 insurance companies across the globe. The results are converted to a letter grade between A++ and E. A++ and A+ indicates a superior rating, from A to A- means excellent and B++ to B+ is very good and on down to E. A score of E means the company can’t conduct business normally.
| Company | Coverage amount | AM Best Rating |
|---|---|---|
| Allstate | $1-5 million | A+ |
| Geico | $1-10 million | A++ |
| Liberty Mutual | $1-10 million | A |
| Progressive | $1-5 million | A+ |
| State Farm | Start at $1 million | A++ |
| Travelers | $1 million to $10 million | A++ |
| USAA* | $1 million to $5 million | A++ |
Note: USAA is only available to military community members and their families.
Best umbrella insurance companies
CarInsurance.com’s editors ranked the best companies. To be considered, a company needed to be among the largest auto insurance companies, demonstrate financial stability with an AM Best rating of A+ or A++, offer umbrella policies in most states and offer coverage limits of at least $1 million.
Some of the best umbrella insurance companies — also on our best insurance companies list — offer the following coverage options and requirements. They’re listed below alphabetically.
Allstate
Allstate, with a superior rating, A+, from AM Best. offers a coverage limit of $1-5 million. An Allstate umbrella policy is also available in most U.S. states.Your minimum coverage must meet the following before you can purchase an umbrella policy.
- Autos and motor homes: $250,000 bodily injury liability per person, $500,000 bodily injury liability per each accident and $100,000 each accident or $500,000 combined single limit property damage liability.
- Homeowners insurance personal liability: $300,000 per occurrence
- Residential rental property: $300,000 per occurrence
- Watercraft: varies by size and type
Geico
The cost of coverage through Geico, with the highest AM Best rating available (A++). depends on your current coverage and personalized factors.To qualify for an umbrella policy, Geico requires a minimum of:
- Autos: $300,000 bodily injury limit per occurrence and $100,000 property damage, $250,000 per person/$500,000 per occurrence (bodily injury), $100,000 (property damage
- Homeowners/renters: $300,000 personal liability coverage is also required.
- Boat insurance policy: Shorter than 26 feet and under 50 hp, $100,000 liability; 26 feet or longer or 50 hp and up, $300,000 liability.
Liberty Mutual
Umbrella insurance through Liberty Mutual, which scored an A or excellent rating from AM Best, includes $1-10 million coverage limits, and is available in all 50 U.S. states. A Liberty Mutual umbrella policy requires:
- Autos:$250,000 bodily injury liability per person, $500,000 bodily injury liability per accident and $50,000 property damage liability on a Liberty Mutual auto policy
- Homeowners and other insurance: $100,000 minimum on other insurance policy limits
Progressive
An umbrella policy through Progressive, rated superior or A+ by AM Best, offers $1-5 million coverage limits and is available in all 50 states. Contact Progressive for an umbrella insurance quote and to learn more about its auto and home policy limits.
State Farm
State Farm achieved a rating of A++ or superior from AM Best. Umbrella insurance through State Farm starts at $1 million with no set maximum limit and is offered in all 50 U.S. states. Its auto and home policy limits vary by state.
Travelers
Travelers also achieved a superior of A++ rating from AM Best.Their umbrella insurance provides policies for $1 million to $10 million of personal liability, which can help protect assets such as your home, car and boat.
USAA
USAA garnered a superior or A++ grade from AM Best and offers umbrella policies from $1 million to $5 million in coverage to USAA members. USAA serves current and former members of the U.S. military and their families. To purchase an umbrella policy, the following limits must be met first:
- Auto insurance bodily injury liability: $300,000 per person/$500,000 per accident
- Auto insurance property damage liability: $100,000 per person
- Rental property insurance personal liability: $300,000 per policy
- Homeowners insurance personal liability: $300,000 per occurrence
- Watercraft personal liability: $300,000 per occurrence
Umbrella policy calculator: See if you need umbrella insurance
Who needs umbrella insurance?
An umbrella policy can benefit anyone with significant assets. This is an extra layer of protection for you and your assets and provides coverage when you reach your primary policies’ limits. It can also be ideal if you have many assets or need additional lawsuit protection.
“Generally, this type of insurance is purchased by wealthy people with substantial assets that could be taken if their other insurance policies did not cover the full amount of the loss. For example, if they caused a major accident or someone was seriously injured at their home,” says Richard M. Alderman, professor emeritus and director of the Center for Consumer Law at the University of Houston Law Center.
A personal umbrella policy may be worth investing in if you:
- Are a homeowner or rental property owner
- Are a public figure
- Coach sports
- Have a teen driver in your home
- Have significant savings
- Host parties in your home
- Own a boat, pool, trampoline or guns
- Own certain dog breeds
- Serve on a nonprofit board
Remember, a personal umbrella policy pays out when the underlying coverage has reached its limits. If you decide to purchase umbrella insurance, most insurers will have requirements on how much liability you already have before they sell you a policy.
How do you get an umbrella insurance policy?
Getting an umbrella policy is relatively straightforward. Most major insurers offer it. You can easily shop around by calling a preferred provider and getting an umbrella insurance quote over the phone or by searching for umbrella insurance quotes online.
You will need established auto, homeowners, condo or renters insurance policies before adding a personal umbrella insurance policy. This might look like contacting your insurer and asking if you can add an umbrella policy for $1 million and your insurance agent telling you that you need to increase other policy liability amounts to qualify.
How much does umbrella insurance cost?
Umbrella insurance is typically sold in million-dollar increments, from $1-5 million. The coverage amount you choose determines how much you’ll pay for the policy, but it generally averages around $200-380 annually.
The cost of umbrella insurance also varies based on risk factors, such as having a teen driver in your household or owning rental properties.
When should you buy umbrella insurance?
You can purchase umbrella insurance at any time. However, if you are at risk of lawsuits or personal liability incidents, such as owning a trampoline or having weekend pool parties, you might want to consider investing in coverage sooner rather than later.
“An umbrella policy limits the risk of possibly losing assets or having to pay money if you suddenly incurred a large liability not fully covered by your auto and homeowners’ insurance,” Alderman says. “For example, how much equity do you have in your home, do you own a vacation home, what is the value of your investments, and what is your annual salary? All of these assets could be at risk if you do not have an umbrella policy.”
Learn more: Is an umbrella policy a waste of money
Frequently asked questions: Umbrella insurance
Do I need umbrella insurance?
You need an umbrella policy if you: Are a homeowner or rental property owner; are a public figure; are a sports coach; have a teen driver in your home; have significant savings; host parties in your home; own a boat, pool, trampoline or guns; own certain dog breeds; or serve on a nonprofit board.
“I believe everyone does, particularly those who have current significant assets or income, good future income potential (i.e., law or medical students) or anyone who stands to inherit a future sizable estate,” says Rob Olson, senior research analyst at the International Risk Management Institute, Inc (IRMI)
What is covered by umbrella insurance?
An umbrella insurance policy provides additional liability coverage over and above the coverage you carry on your personal insurance policies (cars, homes, boats, etc.), Olson says.
The major benefits an umbrella policy provides include $1 million or more of additional liability coverage beyond your primary coverage, additional coverage for legal defense costs and coverage for many lawsuits that primary auto or homeowner’s insurance don’t cover like renting cars abroad, serving on a nonprofit board of directors, etc.
How much umbrella insurance do I need?
Every situation is different. Olson breaks the need down by income.
“If you’re considered in America’s middle class or above, you should have an umbrella policy with at least $1 million limits (umbrella policies are commonly available in million-dollar increments from $1 million to $10 million),” he says. “Wealthy people should probably have $2 (million) or $3 million.”
Final thoughts: Umbrella policies
In general, having umbrella insurance provides peace of mind protection and can benefit anyone who wants additional coverage for accidents, teen drivers in their household, property damage and tenant incidents.
If you would benefit from extended liability coverage, contact your insurance agent or company to discuss your options or get online umbrella insurance quotes.
Resources & Methodology
Sources
Insurance Information Institute. “Should I purchase an umbrella liability policy?” Accessed March 2024.
Insurance Information Institute. “What is an umbrella liability policy?” Accessed March 2024.
Methodology
In assessing the top umbrella insurance providers, CarInsurance.com undertook a comprehensive evaluation of numerous insurers offering this coverage. The comparison was anchored on multiple criteria, including financial strength ratings and their operability across different states.
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