Dear Dave,

Are umbrella insurance policies worth it, or do they just entice people to sue more frequently?

– Tammi

Dear Tammi,

I don't think there's any indication umbrella policies entice folks to bring lawsuits more frequently.

If you hadn't noticed, we live in a lawsuit-happy world. There are lots of greedy people out there who would try to sue for absolutely anything—no matter how ridiculous.

I think these types of policies are worth the money.

You can get a $1 million umbrella policy that attaches to the top of the liability coverage on your car and homeowners for $200 to $300 a year in most places. So, if your original car and homeowners coverage was $500,000, you'd have $1.5 million in coverage with an umbrella policy.

If you've got a substantial net worth, or if there's just something that gives the impression someone might be able to get a lot out of you, an umbrella insurance policy is a smart buy.

— Dave