How do I know if I need an umbrella policy?

Should we wait to get an umbrella policy until we have more assets, or get it now since we both make close to a 6 figure salary? My State Farm agent advised me that my husband and I should think about getting an umbrella policy. We don't own any property yet, but we are saving for a house.

Answer provided by
Shannon Martin
Answered on Jun 25, 2021
Shannon is an expert in personal lines liability insurance with 13 + years of insurance industry experience. She also served as a special insurance liaison to AARP members for 6 of those years. She is a graduate of UL Lafayette and currently resides in NY with her family. Shannon is also an amateur juggler, ukulele player, and is a time travel paradox theory enthusiast.
“You don’t need to have a lot of physical assets to purchase an umbrella policy. A big part of liability coverage is about protecting your future. The earning potential between you and your husband suggests that your retirement plans and 401k add up to a hefty sum and need to be protected.
It would be wise to have your State Farm agent provide you with a quote on the lowest umbrella policy option, which is $1 million. It would give a million dollars of coverage above your current auto and renters policies. Once you purchase your home, the policy would transfer protection to your homeowner’s policy.
Here are a few examples of when an umbrella policy would come in handy:
  • Your pet bites someone and they sue you for medical payments and pain and suffering.
  • You serve alcohol at a party at your home and someone gets in a car accident after they leave. They can sue you for the accident since the drinking took place on your property.
  • Your child hurts another child by accident at the playground.
These are very common situations many people find themselves in. Having more protection is always a good idea.”

Did this answer help you?

Ask us a question by email and we will respond within a few days.

Have a different question?

You can meet us at our office and discuss the details of your question.

Easiest way to compare and buy car insurance

No long forms
No spam or unwanted phone calls
Quotes from top insurance companies