Umbrella insurance: when to get one
The cheap, underappreciated policy that protects everything you've built.
Your auto and home insurance policies each have liability limits — say, $300k. If you cause a serious accident and a jury awards $2M, your insurance pays the first $300k and you personally owe the remaining $1.7M. Umbrella insurance is a cheap supplemental policy that adds $1M, $2M, or more of liability coverage above your underlying limits.
Who needs it
Anyone with assets to lose. That's not 'rich people' — it's 'anyone with a retirement account, a paid-off car, and a house.' A lawsuit can reach those assets. Umbrella insurance is cheap ($150–300/year for $1M of coverage) relative to the catastrophe it prevents.
What triggers it
- Major auto accidents where you're at fault (most common).
- Dog bites.
- Guest injuries at your home (slip-and-fall, pool accidents).
- Teen-driver incidents.
- Libel/slander if you post aggressively online (rare, but covered by some policies).
Put this into practice
Worth tracks your accounts, budgets, and goals — so the concepts in this article aren't just theory.
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