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

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.