Should renters get an umbrella policy?
The amount of protection to get is a personal decision, taking into account your current assets and potential net worth, but you should always price higher coverage than you think you can afford, says Claude Lilly, dean of the College of Business and Behavioral Science at Clemson University.
The cost of the first $1 million in coverage might run about $300 per year, but rates drop for the next $1 million in coverage, which might cost an additional $100 per year, he says.
"It's a matrix of what you can afford and what your exposure is," Lilly says.
Future earnings also are a factor. If you are found liable for an accident, your wages can be garnished to pay a judgment.
"If you've got a good income stream in the future, when you consider the exposure against the cost, it's really prudent to get it," Lilly says.