I’m trying to determine which if a 1 million would be enough or would 2 million be more appropriate. Most of my assets are in retirement accounts and my primary residence. Do I need an umbrella to cover these type of assets? Or should I just have it for after-tax accounts and cash equivalents?
We gave up our umbrella policy because almost everything we have is exempt from bankruptcy.
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What assets are exempt from creditors is determined by state law. A 15 minute consult with a bankruptcy attorney or collections’ attorney will give you a competent answer for your state.
Umbrella policies protect you from liability judgments, not specific accounts—retirement and home equity can still be at risk depending on state law.I would size it based on worst-case liability exposure (income, lifestyle, risks), not just taxable assets—$2M is often cheap peace of mind.
A 15-minute consult with an attorney that yields a useful answer is probably about as easy to find as a $100/yr umbrella policy.
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