It is tied to your personal net worth. Max out on what you

can afford. 250/250/500 is what I could get. Most people also need an umbrella policy. 1 million is the starting point and is about $275 per year for most people.

I have two use cases for you on why net worth matters and cause and effect of not having enough.

1) Guy near me had a daughter get into an accident with a semi truck. She was deemed at fault and caused the truck to wreck. It was hauling horses.

The truck company sued for $4 million of damages.

My friend was worth 10's of millions. He had to write a check for $2.9 million. Why? He had 100/100/300 and 1 MM of umbrella liability insurance. They took that 1.1 million from insurance and went after him for 2.9 more.

His point was he should have had at minimum 3 MM umbrella and 5 MM was the correct value for him.

His other point was in modern times, 1 MM is peanuts in an accident. Just about any accident gets into the 1 MM range for damages.

Now -- if you are worth 100k -- this doesn't matter. The auto insurance would have been all the other side got -- because their lawyer would have stopped them from going after someone with no money to pay. Same if you were worth 1 MM total. Still covered.

Case #2. Another neighbor of mine. Daughter hit someone and killed them. Criminally charged. 19 years old.

He had no umbrella policy. He was worth several million dollars. He just settled for about 1 million and he had to write a check for 900k. He's 55 years old. He's wiped out now. Has no idea how he will retire. Just lost his job recently too.

Last night he was all over me to get my umbrella policy set to 5 MM. It's about 2k per year for that level -- but if you have something to lose, you need it. That level covers you for 99.x% of whatever can happen. Basically 3 MM is the new 1 MM. 250/250/500 is the new 100/100/300. Like 40 is the new 30.