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What Limits Do I Need For an Umbrella?

Multi-colored umbrellas

Umbrella policies can provide excess liability over your home and auto insurance when you need it most. But what underlying liability limits do you need, and how much extra will they cost you?

Let’s start with the basics to ensure everyone’s on the same page.

What is an Umbrella Policy?

Imagine that you host a catered holiday party at your home and invite 50 of your closest friends. You accidentally spill a drink on the floor, and before you can clean it up, one of your guests slips on the liquid and falls. 

After everything is said and done, your guest sustains two broken hips that require extensive surgery to heal properly, which will cost hundreds of thousands of dollars in doctor’s visits, missed work, and pain and suffering. 

As long as you have homeowner’s insurance, the liability portion should cover all of these expenses up to your policy limits. But what happens if you exceed your underlying limits (e.g., you have $300K limits, but the person’s injuries will cost $400K)? This is where an umbrella policy kicks in.

Related: How Does Umbrella Insurance Work?

Because umbrella policies—which generally start with $1 million in coverage and can surpass $10 million—only take effect once you exceed your underlying home or auto limits, it’s often referred to as “excess” coverage. And the good news is that you can take out personal and commercial umbrella policies to help cover you on individual and business levels.

Related: Should Your Business Consider a Commercial Umbrella Policy?

In some instances, carriers issue standalone umbrella policies, while others may attach coverage to your home or auto policy as an endorsement. Either way, what underlying coverages will you need to take out an umbrella policy?

What Home and Auto Limits Do You Need For an Umbrella Policy?

When it comes down to it, not every carrier will require the same underlying home and auto liability limits to take out an umbrella policy. 

With this said, most insurance companies require at least $300K liability for the home and 250/500/100 (or 500 combined single limit) for autos. What’s more, some companies require that you carry at least an auto policy with them to be eligible for umbrella coverage, while others require both home and auto.

As a few examples, here are different carriers and their underlying home and auto requirements:

Company Home Liability Limits Auto Liability Limits
GEICO 300,000 300/300/100 or 250/500/100
Allstate 300,000 250/500/100 or 500CSL
Nationwide 300,000 250/500/100
Liberty Mutual 300,000 250/500/100


Keep in mind that some companies will also require certain underlying limits for extra exposures like recreational vehicles, watercraft (regular and personal), motor homes, motorcycles, and residential rental properties.

In addition to adequate underlying limits, carriers will also look at home and auto activity to ensure no other significant liability losses (or major traffic violations) occurred within the last three to five years.

Let’s carry this idea over to the next section.

How Much Will You Pay For Underlying Umbrella Limits?

Whether it’s a standalone policy or an endorsement attached to your homeowner’s coverage, how much it costs you to increase your underlying auto and home liability limits can vary depending on:

  • Your umbrella policy limits (i.e., a $5 million umbrella will cost more than $1 million);
  • Your current auto and home liability limits (how much you need to increase them to meet the carrier’s underlying requirements);
  • Driving activity (tickets and accidents, including not-at-fault incidents)
  • Whether you need a personal or commercial umbrella (most personal umbrella policies exclude personal liability arising from any business, business property, or professional services).

With these details in mind, some companies advertise that you can purchase an extra $1 million in coverage for less than $20 a month.

The good news is that the team at IHS Insurance Group can provide a hassle-free umbrella quote at your convenience, so you’ll know exactly how much you can expect to pay based on your specific needs and preferences.

Where Can You Learn More About the Limits You Need For an Umbrella Policy?

While the underlying limits you’ll need for umbrella coverage are relatively straightforward, the team at IHS Insurance Group is standing by to answer all your important questions!

Need a FREE Quote or have questions regarding Umbrella Insurance Coverage? We have three convenient ways to reach us:

  1. If you prefer to talk to a licensed agent directly, please call (866) 480-5063.
  2. If you prefer to fill out a quick form and have an agent get back to you at your convenience, use the GET A FREE QUOTE.
  3. Lastly, for those that want an immediate quote, please click HERE.

We look forward to speaking with you today!

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