Umbrella Insurance and is it avoidable?

Net worth isn't relevant to Umbrella. Maybe if you have negative net worth, you might skip this coverage because paying down debt is more important. To avoid the risk, you could move outside the US, since Umbrella is largely needed to protect against liability in our litigious society. You can reduce the risk by not owning or driving a vehicle, but that doesn't eliminate your exposure. You could choose not to buy it - then expose yourself to the risk of a $5M lawsuit for an auto accident involving a cardiologist who can no longer work due to the injury. Your Auto policy may cover $250/500K. The balance goes to you - or your Umbrella policy. For about $300/yr, I am quite happy to shift that risk to an insurance carrier. Risks which are unlikely, well-defined, and catastrophic are perfect for insurance.

Make sure Uninsured/Underinsured Motorist coverage is included. This is one of your greater risk exposures, assuming you drive.

I was wondering about umbrella insurance. I am with geico and it appears to be pretty expensive to bump up my car insurance enough for them to allow me an umbrella policy. Any suggestions where to get a cheaper standalone umbrella?

Just a small point on this discussion..... I wouldn't focus on your net worth for the calculation. I would focus instead on your assets. The courts won't care if you have a $400k loan on your $500k home as they consider a judgement against you. Umbrella insurance is pretty cheap and it should be reviewed annually as your assets grow. I remember the day I signed up for an Umbrella policy...... it was 20 years ago: My wife and I arrived home from an outing and found the neighbor's kid in our back yard jumping off the very top of our kid's wooden play fort in the back yard. It doesn't take much to find yourself in position where your assets are at risk.

Definitely look at net worth, but also risk avoidance, I have a policy that's less than $190/year...seems cheap peace of mind to me.

I think most umbrella policies start at $1,000,000 so it doesn't make much sense to me to have one until you have that much invested outside retirement and your home.

The answer to the "what net worth" question depends partially on how your assets are allocated and partially on where you live. Various states have varying degrees of protection for things like IRAs, 401(k) accounts, brokerage accounts, primary residences, etc. If you have $1M in a 401(k) and $100k in a brokerage and your state protects 401(k) accounts and primary residences against judgements, then you may not need an umbrella policy after all. If you own several homes (personally, not via business entities as rentals) and have $5M in non-retirement accounts (or in retirement accounts in a state that doesn't provide protection for retirement accounts), then you might need an umbrella policy. Note that the protections can vary widely from state to state and and can include factors relating to things like properly held in joint ownership (homes, brokerage accounts, etc).

You should probably do a bit of research into the protections in your state, and then speak with an insurance broker, and possibly an attorney.