A Money Magazine reader asked in their January/February issue how much umbrella insurance he needed. Money's response, in part, was as follows:
Base your umbrella policy on the value of your assets. In a lawsuit, lawyers will aim for your available assets but probably settle for a comparable insurance amount.
They also suggest "adding $1 million for peace of mind."
I recently bumped up my umbrella insurance to $4 million for the following reasons:
- To cover my assets (not that I have $4 million, but I have a sizeable amount).
- Extra "peace of mind" as they note above. I now have rental properties (which have their own $1 million liability policies) and will soon have a teenage driver -- so I'm looking for a bit more peace of mind wherever I can find it. :)
- Umbrella insurance is really affordable. The difference for an extra $1 million in coverage was $60.
How about you? Do you have umbrella insurance? If so, how much and why that amount? If not, why not?