Umbrella insurance has long been a smart, affordable way to protect your assets from unexpected lawsuits. However, many policyholders are now seeing rising umbrella insurance rates that seem higher than ever before. So, why are umbrella insurance rates going up—and what can you do about it?
What Is Umbrella Insurance and Why It Matters
Umbrella insurance provides extra liability coverage beyond your home, auto, or renters insurance policy limits. It’s designed to protect you from large claims or lawsuits that exceed your basic policy coverage. This coverage often includes legal fees, damages, and other liability expenses not covered by primary insurance policies.
Increasing Lawsuit Payouts Are Driving Up Rates
One major reason for rising umbrella insurance costs is the increase in large jury verdicts nationwide. Lawsuits involving car accidents, personal injury, and defamation are leading to multi-million dollar settlements today. Because umbrella insurance covers these claims, insurers are paying out more than ever before.
As a result, insurance companies are adjusting their premiums to reflect this higher level of financial risk.
Social Inflation Is Impacting Insurance Premiums
Social inflation is a term used to describe how societal factors are increasing insurance claim costs significantly. Factors include more aggressive legal tactics, changing jury attitudes, and higher public expectations for compensation amounts. These trends are causing claims to become more frequent and more expensive, thus pushing umbrella insurance rates.
In short, people are suing more—and winning bigger—which directly impacts the cost of umbrella coverage.
Rising Auto Repair and Medical Costs Add Pressure
Another factor influencing umbrella insurance rates is the overall rise in auto repair and medical treatment costs. If you’re at fault in an accident, umbrella insurance may be needed to cover the medical bills of injured parties.
With both healthcare and vehicle repair costs rising quickly, insurers are seeing larger losses across multiple claim categories. Therefore, higher costs in related areas directly impact the amount you pay for umbrella liability protection.
Climate Events and Property Damage Increase Legal Exposure
Extreme weather events are leading to more property damage and related lawsuits involving personal or commercial liability. For example, falling trees, flood-related mold issues, or ice-related slip-and-falls often result in legal claims. In Ohio specifically, we’re seeing increased wind and hail claims. When these claims exceed regular policy limits, umbrella insurance kicks in—raising the insurer’s total financial exposure. That’s why insurers are adjusting pricing models to prepare for more frequent and costly weather-related legal claims.
How You Can Manage Rising Umbrella Insurance Rates
Although rates are going up, there are still ways to keep your umbrella insurance affordable and effective. First, bundle your auto and home policies with the same insurer to receive multi-policy discounts that reduce overall premium costs. Second, another possibility is lowering the deductible on your home or auto insurance to lower your umbrella premium slightly.
Maintaining a clean driving record and avoiding risky behaviors are also a great idea. Claims and violations could increase your liability exposure.
Finally, review your policy limits annually to ensure you’re not over-insured—or worse, underinsured.
Final Thoughts: Why Umbrella Insurance Still Matters
Even with rising rates, umbrella insurance remains one of the most valuable and cost-effective policies available. Umbrella policies provide peace of mind by covering high-cost liability situations that could otherwise drain your savings. While premiums are increasing, the protection it offers is still worth far more than the cost in most cases.
Chat with a Cincinnatus Insurance advisor today to see what umbrella policy options will best protect you from financial disaster!