I recently came across a post at this site: http://www.insurance-weblog.com/all_other_insurance/001176.shtml
The post is entitled “Why Everyone Needs Liability Insurance.” A more proper title would be “Why everyone does not have the same insurance needs.” The author has a $1,000,000 umbrella policy on top of a $500,000 liability policy. The author concludes that “I am assured I only have a slim change to be involved in a liability litigation.”
First, the amount of insurance you have does not have any effect on whether you are involved in liability litigation. If you injure someone, and your insurance company cannot settle the case, you are involved in the litigation. Sure, you may not pay anything, but you still have to disclose, for example, on your mortgage application that you are a defendant in a civil lawsuit. Second, $1.5M in coverage may be right for some people, but if you do not own many assets, or do not engage in certain activities, it may be too much. And, if you have a boat, an RV, a fast car, or something else that might injure someone, you may be underinsured with $1.5M in coverage.
Moral: Dont let anyone else tell you what to buy based on THEIR situation. Buy what is right for you in YOUR situation.