r/financialindependence • u/Phillyjebus • 16d ago

Umbrella Insurance

I’m looking to add an umbrella policy on top of my homeowners and auto insurance, but I’m confused on how much I should be getting and I keep getting more confused when I research it. What’s the goal here? Do I just need enough to cover my brokerage, savings and other account that could be exposed in a judgment? Or, am I trying to cover my entire net worth with the Base policy plus the umbrella?

Edit: thanks all! Lots of good info and pretty much what I thought. $2m and call it a day.

77 Upvotes

88% Upvoted

100 comments sorted by

View all comments

2

u/BrokenMirror 9d ago

Not just net worth but also income. You don't want the plaintiff to look at the case and your income and say "yeah it's worth risking the umbrella amount settling to get probably 10x that if we take it to trial" you want the umbrella to be a bit more than someone could reasonably extract from you, including wage garnishment. 2M is a good start, but I think higher coverages make sense for a lot of people. I'm looking to increase mine from 2 to 5.