In today's litigious environment, lawsuits can run into the hundreds of thousands of dollars or more if you or those living in your home or operating machinery or vehicles you own are determined to have been negligent. Your automobile and homeowner insurance policies will typically cover you up to the first $300,000 of a covered claim. To cover your risk up to $1 million or more, you can usually purchase a personal umbrella policy from the insurance company that insures your home and/or car.

Do You Need Umbrella Coverage?
Umbrella policies are more important when you have significant assets to protect. People with less than $250,000 of net worth should not purchase an umbrella policy. [If you have up to $250,000 of net worth, you should have at least $300,000 liability protection on your auto bodily injury per accident and your homeowners/renters/condominium liability.]

Combine insurance for a price break
When you purchase both your homeowner and automobile insurance from the same insurer, you typically receive a discount off the premiums of both policies.

Ask about minimums
The personal umbrella policy often requires a minimum of $100,000/$200,000 of bodily injury liability protection and $50,000 of property damage liability protection under the motor vehicle liability section of your automobile insurance, and $300,000 of comprehensive personal liability under your homeowner insurance. If you also own a watercraft, there may be a combined single limit for marine liability as well.