Why state minimums are a gamble
State-minimum auto liability (typically 25/50/25) is a traffic-law minimum, not a risk-management plan. A single serious crash — a two-week hospital stay, a surgery, a month of lost wages — routinely produces six-figure damages that exhaust a $50,000 per-accident limit before anyone picks up the phone. Everything above the limit is paid by the at-fault driver personally, out of assets and future wages.
The income-multiple is the standard planners' shortcut for what a jury could reasonably reach: your current assets plus the present value of roughly a decade of earnings. This tool compares that figure against the coverage you actually carry today.
The umbrella layer: cheap protection against the tail
Umbrella policies exist precisely because the distance between your assets and your underlying limits is rarely a gap you can afford to self-insure. A $1M umbrella typically costs a few hundred dollars per year and requires underlying auto limits of at least 250/500 in most markets — which is why the recommendation is always a pair: raise the primary tier, then lay the umbrella on top. The tool quotes the recommended tier and the number of $1M layers needed to close your modeled gap.
Hypothetical example
A family with $300,000 in net worth and $95,000 in annual income, an average risk profile, current 100/300 limits, and no umbrella has a modeled exposure near $1.25M against $300,000 of protection — a gap near $950,000. The recommendation: raise auto liability to 250/500 (or 500/1M) and add a $1M umbrella, which closes the gap for a few hundred dollars a year. This is a hypothetical illustration of the sizing model, not a quote.
What this calculator does not account for
- Exact umbrella pricing, which varies by carrier, state, and household factors
- State homestead and wage-exemption rules that may shield part of your assets
- Underlying coverage requirements your umbrella carrier will enforce
- Umbrella exclusions (intentional acts, business use, some watercraft)
- Your actual lawsuit risk, which depends on driving exposure and venue
For executives & high-net-worth principals
Your exposure is not your net worth — it is your net worth plus tomorrow's earnings. As income and assets build, the gap between primary limits and what a verdict could reach widens, and that gap is exactly what an umbrella layer exists to close. For an executive or business owner, a $1M–$2M umbrella (layered on 250/500 auto and $500k+ home limits) is the standard, inexpensive way to protect both personal assets and the ability to keep working. Because umbrella carriers sometimes exclude business use and certain vehicles, review the policy language with your agent — the coverage a founder's charter service or a side business needs differs from a W-2 executive's.