If you own anything that could realistically be taken in a lawsuit—a home with equity, savings, investments, rental property, a business, even future income—you're a candidate for an umbrella policy. Picture this: you have $500,000 of liability on your auto policy and you cause a serious accident that injures multiple people. The total judgment comes in at $1.2 million. Your auto policy pays its $500,000 limit…and the remaining $700,000 is now your problem. That gap is where attorneys start eyeing your house, your bank accounts, wage garnishment, etc. An umbrella sits on top of your home and auto to catch that extra $700,000 (or more), so your life isn't financially wrecked by one bad day.

The truth is, almost everyone who has something to lose should consider an umbrella. An umbrella policy is usually inexpensive compared to the protection it provides, which is why it's not just for "rich people"—it's for normal families who don't want one accident, one lawsuit, or one freak injury to undo everything they've worked for.

A simple rule of thumb: your liability limits should at least cover your net worth/assets. If your assets plus savings are around $750,000, carrying only $300,000 of liability is like walking around with a target on the rest.

An umbrella policy is usually inexpensive compared to the protection it provides, which is why it's not just for "rich people"—it's for normal families who don't want one accident, one lawsuit, or one freak injury to undo everything they've worked for.

Rate depends on the number of drivers in the household, age of drivers, number of properties, and a few other factors.

An average price for a 1 million dollar umbrella is around $435 a year.

When you stack that modest annual premium against the kinds of claims umbrellas are designed for—lawsuits in the hundreds of thousands or even millions of dollars—the cost starts to feel less like a luxury and more like a no-brainer line item in your protection plan.

- A serious car accident you cause that leads to major injuries, deaths, or extensive property damage

- Your dog bites or attacks someone and they're badly injured

- A guest (or even an uninvited neighbor kid) is hurt or drowns in your swimming pool

- Your child's friend is injured at your home on a trampoline, playset, stairs, or other hazards

- Someone is injured while using a boat, jet ski, or other watercraft you own

- You or your child post, text, or say something about someone that's claimed to be false, damaging, or defamatory