How Much Should I Carry on a Kentucky Umbrella Policy?

A Kentucky personal umbrella should typically match or exceed your total net worth, with a $1,000,000 minimum for most Kentucky households and $2,000,000-$5,000,000 for households with significant assets, teen drivers, rental properties, or high-risk exposures (pool, dog, boat, ATV). Umbrella coverage is one of the cheapest lines of insurance — typical Kentucky umbrellas cost $200-$500 per year per million.

How to Size Your Umbrella

Blake uses three inputs:

• Net worth — assets minus debts; the umbrella should meet or exceed this to protect against a judgment
• Future earning power — for younger high earners, judgment garnishment can reach future wages
• Exposure inventory — teen drivers, pools, dogs, rental properties, boats, ATVs, business ownership all increase risk

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A Kentucky household with $500,000 net worth and no major exposures probably fits $1M umbrella. Same household with a pool and a teen driver — $2M. Same household with three rentals — $3M+.

Typical Kentucky Umbrella Pricing

Umbrella is cheap because it sits on top of primary limits that pay first:

• $1,000,000 umbrella: $200-$400/year typical
• $2,000,000 umbrella: $300-$550/year typical
• $3,000,000-$5,000,000 umbrella: $400-$900/year typical
• Additional rental properties, teen drivers, and youthful watercraft add moderately

What an Umbrella Actually Covers

Personal umbrella extends over the following primary policies:

• Auto liability (bodily injury and property damage)
• Homeowners personal liability
• Rental property liability (if properties are scheduled)
• Watercraft liability (if boat is scheduled)
• ATV/UTV liability (usually if the underlying policy is with the same carrier)
• Personal injury (libel, slander, false arrest)
• Some umbrellas add uninsured/underinsured motorist excess

Umbrella Underwriting Requirements

To be eligible, primary limits must meet the umbrella carrier’s minimums:

• Auto: usually 250/500/100 or 250/500/250 required as underlying
• Homeowners: $300,000-$500,000 personal liability required as underlying
• Any scheduled rental: usually $300,000-$500,000 landlord liability
• Watercraft: varies by boat size; usually $300,000 required

When Kentucky Households Need MORE Than $1M

Blake recommends higher umbrellas when any of these apply:

• Household teen driver (Kentucky teen driver claims can produce very large judgments)
• Swimming pool or trampoline
• Certain dog breeds
• 3+ rental properties
• Household net worth over $1M
• Boat over 26 feet or with high horsepower
• Community leadership positions (board seats, coaching youth sports)
• Public-facing profession that increases defamation exposure

Written by Blake Boswell, owner of the Boswell Insurance Agency, Murray, KY.