Why $1 Million Isn't Enough Umbrella Anymore

A few years ago, a $1M umbrella was the standard recommendation for high earners. It was generous, it was conservative, it was fine.

It is no longer fine.

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Three things changed at the same time.

First: jury verdicts. The American Tort Reform Foundation has tracked a steady rise in "nuclear verdicts" which are judgments over $10M, across the country. Texas is not immune. Dallas County in particular has produced some eye-watering numbers on auto cases involving serious injury.

Second: social inflation. Juries are awarding more for the same facts than they did a decade ago. Reasons are debated. The outcome is not.

Third: who's getting sued. The plaintiff's bar has gotten better at identifying high-asset defendants. Your home value, your business interests, your name — they're all searchable.

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The math now:

If you have $2M+ in home equity, retirement accounts, business interests, or other reachable assets, a $1M umbrella is no longer protection.

For most of my HNW personal lines clients, we're now writing $3M to $10M umbrellas. The pricing is reasonable — adding a second million to a Chubb umbrella might cost $150 a year. The third and fourth million price is even cheaper per million.

The constraint for people is rarely cost. It's almost always that nobody told them they could.

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What to check:

1. Your umbrella declarations page — what's the per-occurrence limit?
2. Your underlying auto limits — most umbrellas require $250k/$500k or higher.
3. Your underlying home liability — usually $300k or $500k.

If the umbrella is $1M and your reachable assets are materially higher than that, there's a conversation worth having.

— Mitchell