How Much Umbrella Coverage Do You Need?
Assumptions on sliders · method reviewed September 7, 2026
Sizes an umbrella liability policy from what a lawsuit could reach: your net worth outside retirement accounts plus a share of your future income, less what your auto and home policies already cover. AboutLess
In plain words. An umbrella policy pays a judgment larger than the liability limits on your auto and home policies. The amount to buy is the amount a judgment could take. That is your home equity, investments, and savings, plus part of what you will earn from here on, since a court can garnish wages for years. Retirement accounts are left out by default, because the law protects most of them from creditors. The tool adds the two parts, subtracts the limits you already carry, and rounds up to the million-dollar sizes umbrellas come in.
Why it matters. Most people buy an umbrella by habit, one million because that is the first size, and never check it against what they have. A number for the exposure turns the habit into a decision.
An example. $1,500,000 outside retirement accounts, $800,000 in retirement accounts left out, and $150,000 a year for 20 more years with 15 percent reachable: the exposure is about $1,805,782, the auto and home policies cover $300,000, and the tool calls for a $2 million umbrella.
Where it stops. Every input is an assumption, and the share of income a court could reach and the years of work left move the answer most. The tool does not compute the exemptions that protect retirement accounts or a homestead, does not model the risk factors that make a suit more likely, and does not know what an insurer will write. It sizes the coverage; the agent quotes it. Everything it leaves out.
Home equity, investments, and savings, less debts. A judgment can reach these.
401(k)s, pensions, and IRAs. Workplace plans are protected from judgment creditors by federal law, and Illinois protects IRAs too, so the tool leaves them out unless you count them.
Gross pay from work. A court can garnish it for years after a judgment.
Until you expect to stop earning.
Illinois caps wage garnishment at 15 percent of gross wages, which is the default. Other states allow up to 25 percent.
Turns years of future garnishment into one figure in today's dollars.
The per-occurrence liability limit on the declarations page. The umbrella pays above it.
- Net worth a judgment could reach
- $1,500,000
- Retirement accounts left out as protected
- Future income a judgment could reach
- $305,782
- $22,500 a year for 20 years, brought back to today at 4%
- Gap above your auto and home limits
- $1,505,782
- The exposure less the $300,000 you already carry
The umbrella also pays the cost of defending the suit, which the arithmetic does not count. The insurer decides what it will write, and it will usually want the auto and home limits raised to a floor first. This is sizing, not a quote. Some things make a suit more likely and are not in the numbers. Teen drivers, a pool, a dog, a rental property, a boat, or a seat on a board each push the answer up.
This is an assumption tool, and every input is yours to set. It counts the exposure as net worth outside retirement accounts plus the share of future pay a court could garnish, brought back to today at the discount rate, and it rounds the gap above your auto and home limits up to the next million. It leaves out the exemptions that protect a homestead and retirement accounts, which are stated rather than computed, the defense costs the umbrella pays, and the risk factors that raise the chance of a suit. Method reviewed September 7, 2026. Hypothetical; educational, not advice.
This is a simplified model, not your actual tax return or plan. It only knows what you type in, leaves out rules that may apply to you, and cannot weigh the other facts and trade-offs a real decision depends on. Before you act, talk with a professional who knows your whole situation.
Educational only, not investment, tax, or legal advice. Results are hypothetical estimates that vary with each use and over time and are not guaranteed accurate or complete. Using this tool creates no client relationship with Considerate Capital, and the site that linked here is not affiliated with it. By using it you agree to the tool terms.