What limit of coverage should I maintain for personal liability?

Lawsuits are the “American Way.” You should provide a minimum of $500,000 of coverage for personal liability under your homeowner’s insurance policy (some companies offer a primary limit of $1,000,000). You should also consider an umbrella policy to provide an additional $1,000,000 of personal and automobile liability coverage. The cost to provide an additional $1,000,000 of coverage is generally a few hundred dollars per year. (Higher limits are available up to $5,000,000.)