Liberty Mutual offers Umbrella Insurance, which adds an extra layer of personal liability coverage in addition to your car or home insurance policy—umbrella insurance from Liberty Mutual also protects your assets from a wider range of liabilities than a regular policy.
If you’ve got a high net worth or if you are parents of kids and teenagers and want to protect their financial future, umbrella insurance is a very good idea. But is it worth it for you and your family? We’ll review Liberty Mutual’s umbrella insurance policy offerings and see if it is a good thing to add on top of your car insurance
or homeowner’s insurance
policies. What is an umbrella insurance policy?
An umbrella insurance policy, or personal liability protection as Liberty Mutual sometimes refers to it, is an extension of your personal liability insurance
that kicks in once you’ve exhausted your car or homeowner’s insurance coverage. Umbrella insurance also covers certain things that your personal liability insurance won’t, like mental anguish. On a Liberty Mutual umbrella policy, liability coverage
starts at $1,000,000 and can be topped up as high as $3,000,000. Other insurers go even higher, as high as $10,000,000. Whether you choose umbrella coverage from Liberty Mutual or another insurer, this coverage far exceeds a typical car or home insurance policy, which usually ranges from $300,000 to $500,000. And umbrella insurance isn’t very expensive, considering the expansive coverage you get—it will cost somewhere between $150 to $300 annually through Liberty Mutual. In order to use your umbrella policy coverage, you must have purchased it before a loss, as umbrella insurance will only kick in once your underlying coverage has been exhausted.
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How does umbrella insurance work with Liberty Mutual?
In order to purchase umbrella insurance from Liberty Mutual, you will have to hold the minimum amount of required liability insurance first, which is usually $250,000 in liability coverage—this is an approximation as Liberty Mutual doesn’t list the actual amount on its website. As per Liberty Mutual, that liability coverage (such as car or homeowner’s insurance) does not have to be a Liberty Mutual policy in order to buy umbrella coverage from them.
What does Liberty Mutual umbrella insurance cover?
Under a Liberty Mutual umbrella insurance policy, you’ll get additional insurance over the limits of the following policies:
Watercraft or recreational vehicle insurance
With a Liberty Mutual umbrella policy, it covers all family members in the policyholder’s household, protects rental properties, and offers worldwide coverage.
Liberty Mutual’s umbrella coverage also extends to situations that your homeowner’s or car insurance won’t cover, such as:
Violation of right of privacy
Wrongful eviction or wrongful entry
Payment of defense costs, legal fees and other lawsuit fees (including lawsuits dismissed as frivolous or groundless)
How Liberty Mutual’s umbrella coverage extends regular car or home insurance
If you carry umbrella coverage from Liberty Mutual, it will cover medical expenses and repair bills for other people if you exhaust your regular car or home insurance.
Here’s an example of how this could work. Let’s say you are fiddling with the radio station while driving on a snowy highway, and you cause a multi-car pileup. Since you would be classified as the at-fault driver
, you would be responsible for paying the medical bills and repair costs of any other drivers involved in the accident, along with the medical bills of any passengers. A standard car insurance policy purchased through Liberty Mutual with both bodily injury liability
and property damage liability
coverage will usually offer up to $300,000 in coverage per accident for other driver’s medical expenses and car repairs. But for argument’s sake, let’s say the accident you caused led to medical bills of $500,000 for all injured parties, and two of the five cars you hit were written off as total losses. Without umbrella coverage, in this case, you would easily surpass your regular car insurance coverage—the injured drivers or passengers would be able to pursue personal lawsuits against you in order to recover their damages. MORE: How different types of car accidents affect your insurance rates
What it won’t cover
Unfortunately, Liberty Mutual’s umbrella coverage doesn’t cover everything under the sun. The following exclusions apply to Liberty Mutual’s umbrella coverage:
Intentional damage caused by an insured party
For example, let’s say you love to take baths with scented candles because of the relaxing aura they create—fair enough. But amidst all that relaxation, you fall asleep and fail to realize that one of the candles lights a curtain on fire. The resulting damage spreads to the house next door, and the repair costs exceed your regular homeowner’s insurance. If you carry umbrella insurance, this added layer of protection should cover the remainder of your neighbor’s costs.
That said, if you were lighting candles to test them for your fledgling candelabra business, a fire broke out and the same result ensued (part of your neighbor’s house gets damaged), umbrella insurance would not cover this. Instead, you’d have to hope that your business insurance would cover the cost of your neighbor’s home damage.
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4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars4.7/5 app rating | Trusted by 5M+ drivers How much does Liberty Mutual umbrella insurance cost?
The cost of a Liberty Mutual umbrella policy will depend on many risk factors and will vary from one person to the next. That said, umbrella insurance from Liberty Mutual usually falls within the range of $150 to $300 annually. That’s pretty inexpensive compared to the amount of coverage it offers.
Who can buy a personal umbrella policy from Liberty Mutual?
Before you can buy an umbrella policy from Liberty Mutual, you’ll need to first be carrying an underlying policy, such as car, home, or watercraft insurance. The only way you’ll be able to use Liberty Mutual’s umbrella policy is if you’ve reached the maximum limit of the underlying policy.
Liberty Mutual’s umbrella insurance is available in 47 states and the District of Columbia. You won’t be able to purchase umbrella insurance from Liberty Mutual if you live in Alaska, Hawaii, or Missouri
. But if you live in a state other than these three, you should strongly consider umbrella insurance if any of the following apply to you: You have a high net worth
Your property has a swimming pool, trampoline, tree house, or swing set
You have children you are legally responsible for (this could cover your toddler pushing another kid off the playground swingset or your teenage college student letting a house party—at your house—get out of hand)
MORE: How to get cheap car insurance for young drivers
Is a Liberty Mutual personal liability umbrella policy worth it?
While a Liberty Mutual umbrella policy offers great protection, whether it's right for you will be for you to decide. Here are some pros and cons of a Liberty Mutual umbrella policy:
Pros
…it is decently affordable. Buying an umbrella policy from Liberty Mutual will likely set you back at most $300 for an entire year of coverage, or roughly $25 a month.
…it has higher limits. On average, a U.S. hospital stay after a car accident lasts about 4 days and costs around $60,000. Also, the average car on U.S. roads costs roughly $48,000 apiece. If you don’t have umbrella coverage and you cause an accident where multiple people are hurt, you could face serious out-of-pocket costs
from just one accident. …it offers protection against things regular insurance does not. For instance, if you get sued for mental anguish stemming from a car accident you caused, your legal defense could easily eat away at your savings.
Cons
…it is more expensive. Even if adding umbrella coverage is relatively inexpensive, you’ll likely need to meet high coverage limits to be deemed eligible. This is why umbrella coverage is a better option for those who already carry high liability limits.
…not everyone is eligible. Your eligibility for umbrella coverage will depend on many risk factors, including where you live, your credit rating, and prior loss history.
…it doesn’t cover property damage or your own injuries. Your own expenses aren’t eligible to be covered by your umbrella policy—that’s why purchasing collision
insurance and comprehensive insurance
are a good idea if you only carry minimum coverage. The bottom line
If your liability limits are lower than your total assets, then an umbrella policy from Liberty Mutual is a good way to guard your financial future.
If you haven’t hit the limit on your liability policy or if you don’t yet carry property damage liability coverage, you might want to wait before adding an umbrella policy.
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