A $1M umbrella policy costs most families between $200 and $400 a year. A $2M policy is often another $100. That's the punchline. Now for the reason.

Your auto and homeowners policies each have liability limits — typically $300K to $500K. If a teen driver in your household causes a serious accident, or someone is injured at your pool, or your dog bites the wrong guest, those limits get exhausted quickly. Everything after that comes from your assets.

An umbrella policy sits on top of those base policies and adds a million dollars of coverage that fills the gap between what the base policy pays and what the plaintiff's attorney is asking for.

The requirement: most carriers make you raise your underlying auto liability to $250K/$500K first. That's a good thing. Do it.

This is not the exciting part of a financial plan. It's the part that keeps the rest of the plan from evaporating in a single afternoon.