Buying Umbrella Insurance – Qualifying & How Much
Your basic qualification for an insurance company to consider your request to buy umbrella insurance is that you already have auto or property insurance. Some companies will accept renters or condo insurance as well. Additionally, you must have a minimum amount of coverage which varies by company. (check with All Coverage Insurance for minimums that fit your needs for both auto insurance and homeowners insurance.)
How much umbrella insurance do you need?
Ideally buy at least enough umbrella insurance to cover your net worth. This includes your savings, other assets and income. You may also want to include potential income if you’re likely to earn much more in the future than you do now. Since you have no idea how much a worst-case lawsuit may set you back, it’s tough to pin down exactly how much umbrella insurance is the “right” amount. That said, umbrella policies typically start at $1 million in coverage and thereafter sell in million dollar increments … so you’ll be pretty well protected wherever you choose to start with your coverage.