Do I need umbrella insurance?

Umbrella insurance is worth strong consideration once you have assets worth protecting. It's extra liability coverage that sits on top of your auto and homeowners policies, kicking in after those limits are exhausted — typically in increments of $1 million. If you cause a serious car accident or someone is badly injured at your home, a judgment can exceed your underlying liability limits and reach your savings, home equity, and future wages. An umbrella policy absorbs that excess. It's surprisingly affordable, often $150–$300 a year for the first $1 million, because large claims are rare. Good candidates include homeowners, people with significant savings or income, landlords, those with teen drivers, pool or trampoline owners, and anyone with a public profile. The rough guideline is to carry umbrella coverage at least equal to your net worth.