What is a common coverage limit for a liability claim in a personal umbrella policy?

A personal umbrella policy is designed to provide an extra layer of liability protection beyond what is offered by standard homeowners and auto insurance. Typically, these policies start at a coverage limit of $1 million and can go much higher, often extending to $5 million or more. This higher limit is crucial for individuals who may face significant liability risks, as it safeguards their assets against large lawsuits that can exceed the coverage provided by underlying policies.

The reason for starting at $1 million is based on the potential costs associated with severe liability claims, such as serious injury or property damage claims, which can easily surpass that threshold. This ensures that the policyholder has sufficient coverage to protect against such financial threats. Overall, the $1 million minimum is a standard in the industry that reflects the serious nature of personal liability risks.