Think about the gap between your actual liability coverage on your home and car versus what your property and assets are actually worth. If your assets are worth more than your policy limits, that’s where umbrella insurance comes in handy to fill the coverage gap.
When you plug numbers into an umbrella insurance calculator, you’re not just looking at your current policy limits. You’re figuring out how much extra coverage you might need beyond what your regular home and auto policies already cover.
Plenty of these liability calculators exist online. They’re pretty straightforward and only take a few minutes to complete. Once you enter your information, the calculator spits out a coverage amount recommendation.
When you get a quote through an umbrella insurance calculator, it’ll show you the minimum coverage your state requires. These minimums change depending on where you live, so your coverage needs will be different if you’re in California versus Ohio.
To get accurate results from an umbrella insurance calculator, you’ll want to understand your state’s liability and property laws first. The National Insurance Crime Bureau (NICB) offers free liability insurance quotes. Your state insurance department also has information about local laws and regulations around liability and property limits.
Sure, running the numbers through a calculator seems easy enough, but you need to know some specifics about your current situation first. What do your home and car insurance cost right now? What are your assets actually worth? You’ll need details like average repair costs for your home and your car’s current value.
Here’s something that trips people up: your home and auto policies don’t cover liability for the full value of what you own. You can only collect repair costs if you’re found liable for an accident or damage to someone else’s property.
Regular liability and property coverage has some gaps too. For instance, it won’t cover damage a renter might cause to your car while they’re living in it. The calculator looks at the difference between your car’s current value and what it would cost to replace it to figure out your liability and replacement coverage needs. If you’re shopping for car insurance, running these numbers first makes sense before you buy a policy.
After you know how much liability coverage you need for your car, you can decide what protection you want for everything else under your liability policy. Liability coverage tends to be the cheapest option, so it makes sense to start there.
Homeowners insurance covers your house against fire damage or water leaks. This type of coverage usually doesn’t cost much.
An umbrella insurance calculator helps you figure out your property limits too. This covers liability for injuries that happen on your property or in your home, plus theft of your belongings like furniture, jewelry, photos, or antiques.
While liability and property protection insurance gives you less financial coverage than homeowners insurance, it costs more to buy and keep up. You might want to prioritize this type of coverage when you’re shopping for home or car insurance.