If your networth is all in protected accounts (401K or if your state protects them, IRAs) then it is less worrisome, IMO, to carry the state minimums.
However, once you have significant assets that aren't in protected accounts (investment properties, second homes, taxable accounts, Roth IRAs, big emergency fund, home purchase downpayment savings accounts, etc) then you should definitely increase your liability protection. In this case, you should also make sure you have decent home owners (or renters) insurance coverage for liability as well.
Like the OP said, he's young and doesn't have a lot of assets, and he would be so lucky as to settle for his entire net worth if he sent someone to the hospital. Also it's hard to contribute to retirement when your entire paycheck is being garnished for 25 years to pay off a $1,000,000 medical bill.
Here's what happens to any of you that have minimum limits: The insured company writes a check for $25k or whatever, and says wow thank goodness that moron only bought the minimum limits, we're off the hook!
And how good of a lawyer can you afford without insurance just on your own? Especially when you're up against a law firm that could easily make $300,000+ contingency off a slam dunk case against you.
You know what's a scam? UNDER-insurance - trying to save $50 or $100/yr while participating in an activity that causes BILLIONS in damages every year (driving).
You know why insurance is more expensive for males under 25 years old? Because they cause 10x the accidents as everyone else. But hey, it's your life.
https://www.trustedchoice.com/umbrella-insurance/coverage-faq/#-6288951When choosing your coverage limits, consider three things:
The risks you may face. Consider risks as a homeowner or renter, the risk of causing an accident during your work commute, and any potentially dangerous activities you participate in that could put those around you at risk.
The value of your assets. These include properties, possessions, stocks, bonds, savings and retirement funds. The more assets you have to protect, the higher the umbrella policy limit you should consider.
The potential loss of future income. Because liability lawsuits can result in loss of both current assets and future income, even those with few assets to protect may want to consider the long-term ramifications of a serious claim.
When you review your future income, consider your earning potential. You not have many assets now, but if you’re on track for a high paying career, you could be involved in a lawsuit that can target money you haven’t earned yet.
Speak with an independent insurance agent to determine your specific risk factors and learn more about how to protect your current and future assets.
