Should You Get a USAA Umbrella Policy?
Veterans, military members, and their spouses and children can get up to $5 million worth of umbrella liability insurance through USAA. Is it right for you?
Written by Amber Reed
Reviewed by Pat Roache
USAA’s personal liability insurance—also called an umbrella policy—is additional liability coverage that goes beyond the range of a regular home, renter’s, or auto insurance policy to provide a broader and more robust level of protection.
If you own a home, have a lot of assets you want to protect, or are a parent (even a pet one!) then an umbrella liability policy might be a smart choice.
USAA only offers coverage to veterans, members of the US military, and their spouses and children. If this applies to you, then you might want to take a minute to consider adding an umbrella policy to your
homeowners
, car insurance
, or renter’s insurance
policy. What is an umbrella insurance policy?
Umbrella insurance is also referred to as excess liability insurance or a personal umbrella policy (PUP). But those all mean the same thing—a
personal liability insurance
policy that not only provides a higher dollar amount of coverage than a standard home or car liability policy
but also covers a broader range of events.The liability coverage amount of an umbrella policy starts at $1,000,000 and can be raised in million-dollar increments up to five or even ten million dollars of coverage, depending on the provider. This is much more than the standard maximum coverage available with an auto or homeowner’s policy, which is generally $300,000 or $500,000. Another plus? Umbrella insurance is generally quite affordable—average yearly costs range from $150 to $300.
Since an umbrella policy is intended to be additional coverage, it will only kick in after the liability limits of your other policies have been reached. This means that providers generally require you to have certain policies in certain amounts before you’re eligible for umbrella coverage.
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How does umbrella coverage work with USAA?
USAA requires that any liability policies you have must meet limits of at least these amounts to qualify for umbrella coverage:
- Rental property insurance personal liability: $300,000 per person
- Homeowners insurance personal liability: $300,000 per person
- Watercraft personal liability: $300,000 per person
In most states, you’re required to have an auto insurance policy through USAA, but this doesn’t apply in
New York
, Pennsylvania
, or Hawaii. Other requirements vary by state, so talk to a USAA agent for details. What does USAA umbrella insurance cover?
USAA’s umbrella policy covers losses from situations that a standard auto or homeowners policy doesn’t, such as:
- Libel, slander, and invasion of privacy
- False arrests
- False imprisonment
- Wrongful eviction
- Mental anguish or emotional distress arising as a result of a bodily injury
It also covers repair costs, medical bills, and lawsuits that go beyond the limits of your other liability policies. The scope of every provider’s coverage varies, so make sure you understand all the details of your coverage and ask your agent to clarify any questions you have.
Now let’s look at a few examples of when an umbrella policy would come into play. Let’s say an elderly neighbor comes by to give you a package that was mistakenly delivered to them. Your sweet but exuberant labrador accidentally knocks them over, and they break a hip. Their hospital costs extend well into six figures, and what’s even worse—their family wants to sue.
This scenario is not only horrible, but it could also leave you on the hook for a massive amount of damage. But once your homeowner’s or renter’s liability limits are reached, an umbrella liability policy would kick in with at least $1,000,000 worth of additional coverage for medical bills and potential lawsuits.
Your umbrella policy could also be a financial life preserver in a major car accident where you’re the at-fault driver. If you happen to cause an accident that involves multiple vehicles, a lot of injuries, or a lot of property damage, you could easily exceed the limits of a standard auto liability policy. But with an umbrella policy, you would get a lot more protection for a relatively small amount of money.
MORE: How different types of car accidents affect your insurance rates
What it won’t cover
Even though it covers a lot of scenarios, a USAA umbrella policy doesn’t cover everything. Here are a few things that it can’t be used to pay for:
- Your own injuries or property damage
- Damage that was intentionally caused
- Business-related liability
- Damages stemming from a driving contest or challenge
- Damage caused by a nuclear energy occurrence
So if you’re simply not paying attention and cause a multi-car pileup in traffic, the other drivers’ damages could be paid out of your umbrella policy if need be. But if you caused that pile-up because you and a buddy were attempting to see who could race around the block fastest, your umbrella policy would not be usable.
How much does USAA umbrella insurance cost?
The cost of an umbrella policy is extremely variable, as a lot of it depends on the individual being insured. But the positive news is that it’s generally quite affordable.
Some sources report that USAA’s umbrella policies have an average cost of about $230 a year, while USAA’s website states that you can get $1,000,000 of liability coverage for “about $1 per day.” But no matter what, it’s a relatively small amount for a lot of coverage.
MORE: The basics of pet liability insurance for renters
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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+ driversWho can buy a personal umbrella policy from USAA?
First and foremost: You’ll need to be a veteran or a member of the US military, or the spouse or child of one to purchase coverage from USAA. USAA offers coverage in all fifty states, so there are no geographic limitations.
The particulars of the other policies you need to have (and who you have them through) vary by state, but any liability policies need to have at least the maximum amounts mentioned earlier.
When should you consider an umbrella policy? It’s a wise choice if:
- You have a lot of assets you want to protect
- You have a swimming pool, trampoline, swingset, or any other attractive nuisances on your property
- You own a dog
- Your total net worth is higher than your current liability coverage
- You’re particularly vulnerable to lawsuits
As USAA’s website succinctly puts it, “you don’t have to be a millionaire to get sued like one.”
Is a USAA personal liability umbrella policy worth it?
Is that extra protection worth a few hundred dollars a year? Let’s weigh some pros and cons:
Pros
It’s affordable. At between $150 to $300 a year, an umbrella policy is a relatively small expense.
It offers much higher limits. The
cost of a car accident
or an accident on your property can get astronomical, and a single event could leave you with some hefty out-of-pocket costs once your regular policy limit has been reached. It offers broader coverage. An umbrella policy covers losses in scenarios standard policies don’t, like a libel lawsuit. But this still doesn’t make it advisable to talk trash on Nextdoor, mind you.
Cons
Extra expense. The policy itself isn’t too expensive, but the higher limits you’ll need on your other policies to be eligible means that your overall premiums will be higher.
It’s not available to everyone. You have to have a military connection, and even then there might be certain risk factors that preclude you from getting an umbrella policy.
Your own damages aren’t covered. Things like your medical bills or damage to your own property aren’t covered under an umbrella policy. For example, you’d still need
collision
and comprehensive coverage
to protect your car, and a personal injury protection (PIP)
policy to help pay your medical bills. The bottom line
Are the limits of your liability policies less than your assets and you’ve reached the maximum amount on them? If so, an umbrella policy from USAA makes a lot of sense and is well worth the investment.
But if you’re not at the maximum liability limit or don’t have full coverage on your car, then it’s a better move to build up your basic coverage before you start considering an umbrella policy.
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