Should You Get an AAA Umbrella Policy?

A personal umbrella policy from AAA can offer up to $3M of excess liability coverage for your assets from lawsuits. But is it worth it? Here are the details!
Written by Sarah Gray
Reviewed by Kathleen Flear
AAA offers personal umbrella insurance in several states to extend protection to pay for damages not covered by other insurance you may have. If you’re worried that your auto, homeowners, or watercraft policy won’t cover you in case of a lawsuit, an AAA personal umbrella policy may be right for you.
If you don’t have a high net worth, you may not have considered adding a personal umbrella policy to your insurance coverage. However, this
type of insurance
isn’t only for the super-rich. Anyone whose liability limits aren’t high enough to resolve a claim or lawsuit puts their assets at risk—but an umbrella policy can help you keep those assets safe.
In this guide, we’ll review AAA’s umbrella insurance offerings to see if adding them to your current
car insurance
policy is the right move for you.

What is an umbrella insurance policy? 

A personal umbrella policy (PUP), or umbrella insurance, is a type of
personal liability insurance
that can protect your assets if your auto insurance or homeowners insurance policy limits aren’t sufficient to cover the total costs of a claim or lawsuit. In addition, umbrella policies cover liability claims not covered by auto and homeowners policies, such as:
  • Libel
  • Slander
  • False imprisonment
  • Mental anguish
Liability coverage
on umbrella policies is offered in $1M increments, which can go as high as $10M depending on your insurance provider.

How does umbrella insurance work with AAA? 

Once a policyholder has satisfied the required limits for auto, homeowners, and/or
rental property insurance
, AAA offers their customers the option of purchasing an additional personal liability umbrella insurance policy. To purchase an AAA umbrella policy, AAA members must have a minimum of $500,000 liability coverage on their home and auto through AAA’s affiliate insurer, the Interinsurance Exchange of the Automobile Club.
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What does AAA umbrella insurance cover?

AAA umbrella insurance policies pick up the slack after your auto and homeowners policies have been exhausted. In addition, they offer liability protection for situations not covered by standard liability policies and for individuals not usually covered by those policies. Here are some examples of what an AAA umbrella policy will cover:
  • Claims beyond coverage provided by home, rental, auto, or watercraft policies—If you cause a 10-car pileup, your liability coverage will be exhausted long before all ten driver’s vehicles are repaired. Your umbrella policy can pick up the slack.
  • Policyholder plus members of the policyholder’s household—If your teenage son was the one who caused the 10-car pileup, your umbrella policy will still cover it.
  • Fines and judgments associated with lawsuits for malicious prosecution, wrongful entry, invasion of privacy, etc
  • Fines and judgments associated with lawsuits for libel, slander, false imprisonment
  • Attorney fees/other expenses related to lawsuits
MORE: How different types of car accidents affect your insurance rates

What it won’t cover

As you’ve likely gathered, umbrella insurance has some great benefits, but it doesn’t cover everything. That’s why it’s an additional policy that customers can add to their existing AAA policies rather than a standalone option. Exclusions of an AAA umbrella policy include:
  • Damage to your own property—It’s a liability policy, so it only covers costs when you’re liable for damage or injuries to another person or their property.
  • Damage caused purposely or criminally—If you intentionally damage someone else’s property or injure them, neither your umbrella policy nor your standard liability policies will cover you.
  • Damage or injuries sustained during business or professional activities—You’ll need business liability insurance for that.
  • Liability you agreed to assume under a signed contract.
  • Liability related to war or armed conflicts—The costs associated with damages and injuries caused during wars and armed conflicts are too high for any insurance provider to cover.

How much does AAA umbrella insurance cost? 

Like most insurance policies, the cost of an AAA umbrella insurance policy will vary from one policyholder to the next. But contrary to popular belief, it’s actually very affordable. Since you’re already required to carry substantial amounts of liability coverage to qualify to purchase umbrella coverage, the additional cost of that umbrella policy is almost always relatively inexpensive.
How inexpensive? The average $1M umbrella policy only costs around $150 to $300 per year. You can expect to raise your coverage to $2M to tack on an additional $75. For each $1M in coverage added after that, you can expect your premiums to increase by about $50 per year.
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Who can buy a personal umbrella policy from AAA? 

Current AAA members who carry at least $500,000 minimum liability auto and homeowners coverage through AAA’s affiliate insurance provider, the Interinsurance Exchange of the Automobile Club, are eligible to purchase an umbrella policy.
AAA umbrella insurance is only available in seven states:
Umbrella insurance isn’t necessarily for everyone, but there are certain circumstances that make carrying an umbrella policy a good idea. An AAA umbrella policy may be right for you if you have:
  • $500,000 or more in assets
  • You have a swimming pool or other entertainment structures on your property that could pose a risk to guests or neighbors
  • You own a dog
  • You have
    teenage drivers
    in your household
  • You have children of any age that you are legally responsible for 
MORE: How to get cheap car insurance for young drivers

Is an AAA personal liability umbrella policy worth it? 

That’s the big question, isn’t it? An AAA umbrella policy can offer great protection, but is it worth it for you? Let’s consider the pros and cons to see if purchasing this additional coverage is the right move for you and your family.


It’s reasonably affordable—an umbrella policy usually adds just $25 or less to your monthly insurance premium.
It offers higher limits than liability coverage—Remember that 10-car pileup we mentioned earlier? Good luck finding a basic liability policy with coverage limits high enough to cover repairs on 10 vehicles.
It offers protection where standard auto and homeowners policies don’t—If you’re sued for just about anything, the costs of attorney fees and other expenses related to lawsuits alone can bankrupt you—unless you have an umbrella policy to protect you.


Affordable or not, it still costs more than basic liability coverages—Not only does it tack on an additional cost to your premiums, but you must also carry substantially more liability coverage just to qualify to purchase it. This makes it a better option for policyholders who already have high liability limits to begin with.
It’s not available for everyone—AAA umbrella policies are only available in seven states, and even if you qualify based on liability minimums, you may not qualify based on various risk factors.
It doesn’t cover you or your property—Like liability coverage on a vehicle, a personal umbrella policy only covers damages and injuries to others and their property that you’re found liable for.

The bottom line

If you have more assets than your liability insurance will cover, and you’re carrying the maximum liability coverage available, purchasing an umbrella insurance policy through AAA is a smart option to protect you and your assets.
If you haven’t yet purchased the maximum available liability coverage or you don’t have your own property damage insurance, a better plan would be to work on building your own protection before you invest in an umbrella policy.
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