Your RSUs Vested. Now You Need Umbrella Insurance.

The first time Priya's stock vested, she barely noticed it — a few thousand dollars, deposited quietly, a couple of years out of grad school. By the time the fourth year vested, the math had changed completely. Her brokerage account had crossed $2 million, the cash for a down payment on a house near Sammamish was sitting in her checking account, and on paper she was, by any honest definition, a high-net-worth household.

Her insurance hadn't moved an inch. She still carried the auto policy she'd bought as a new driver, with a $100,000 liability limit and no umbrella. She'd never given a serious thought to what would happen if she were ever at fault in an accident that hurt someone.

That gap — between what a person is worth and what their liability coverage actually protects — is the most common hole we see in newly wealthy households. And equity compensation creates it almost perfectly.

Why vesting quietly breaks your insurance math

Liability insurance exists to stand between your assets and a lawsuit. The problem is that most people set their coverage when they had very little to protect — and never revisit it. When your wealth arrives gradually through vesting, there's no single moment that prompts the review. No closing, no signed paperwork, no agent calling. The number in your brokerage account just grows.

Meanwhile, the thing that determines how much liability coverage you need is exactly that growing number. In a serious lawsuit — a bad car accident, an injury at your home — a plaintiff's attorney can pursue your savings, your investment accounts, and even your future earnings. Vested equity is the most visible, most attachable wealth there is. The more you have, the more exposed you are, and the more your coverage needs to grow to match.

How much umbrella coverage you actually need

The working rule used by most advisors: carry an umbrella limit at least equal to your net worth — and ideally a bit more, because a judgment can reach future income, not just current assets.

• If you're worth $1 million, a $1M umbrella is a floor, not a ceiling.
• If you're worth $2–3 million after a few years of vesting, you're likely looking at $2M–$5M in umbrella coverage.
• High earners with meaningful future income at stake often size higher than their current net worth alone would suggest.

The good news is that this is one of the cheapest protections in all of insurance. A $1 million personal umbrella typically runs $150–$300 per year, and each additional million is usually only $75–$100 more. For someone whose equity is now doing the heavy lifting in their net worth, that is a rounding error against what it protects.

The underlying limits that have to line up

An umbrella policy doesn't work on its own — it sits on top of your home and auto policies and only activates once their limits are exhausted. Most umbrella carriers require minimum underlying limits before they'll attach, typically:

• $300,000 in home/renters liability, and
• $250,000 / $500,000 in auto liability.

If your underlying limits are too low — like Priya's original $100,000 auto limit — there's a gap beneath the umbrella where you're self-insuring. Raising those underlying limits is usually inexpensive and is the first thing to fix before the umbrella goes on top.

Why this gets missed — and why it matters now

Equity wealth doesn't feel like wealth. It's a number on a screen, often still partly unvested, often earmarked in your head for a house or a goal. It rarely triggers the gut-level "I have something to protect now" instinct that buying a first home or a business does. So the coverage review never happens — until there's a claim, and the limits turn out to be set for a life you left behind several vesting cycles ago.

If your equity has vested into real money, the move is simple: get your liability coverage re-sized to the net worth you actually have, not the one you had when you signed up.

Frequently asked questions

Do I count unvested RSUs toward how much umbrella I need? Generally you size coverage to your current net worth — vested equity, cash, home equity, and other assets you actually hold. Unvested equity isn't yours yet, but if a large tranche is vesting soon, it's reasonable to plan ahead rather than re-paper your coverage every few months.

Is a $1 million umbrella enough once my stock has vested? For many newly wealthy households, no. A $1M limit is where most agents stop the conversation, but the standard guidance is to carry at least your net worth. If vesting has pushed you past $1M in assets, your umbrella should usually move with it.

How much does umbrella insurance cost for someone with a few million in assets? A $1M umbrella is typically $150–$300/year, with each additional million around $75–$100. A $3M umbrella for a high-net-worth household often lands in the few-hundred-dollars-a-year range — modest relative to the assets it shields.

My financial advisor told me to get umbrella insurance but didn't say how much. Where do I start? Start with your net worth as the floor, confirm your home and auto liability limits meet the umbrella's minimums, and size up from there based on your exposure — rental property, teen drivers, household staff, and future earnings all push the number higher. An independent broker can model this against your actual situation.

More in this series: You're 'High Net Worth' on Paper — and Probably Underinsured · Asset Protection When Most of Your Wealth Is Equity

Related: Coverage Gap Calculator → · The Equity-Wealthy Household’s Insurance Guide →

Because protecting sudden or equity-driven wealth spans more than one policy, it's worth reading How Much Umbrella Insurance Do You Need? and How Much Homeowners Insurance Do You Need for a $2 Million Home? alongside this.

Trella Insurance is an independent brokerage in Bellevue, WA. We audit your existing coverage against the net worth you actually have — and close the gaps equity compensation tends to leave behind. Start with a free coverage review.