By law, the maximum liability insurance you can have with your auto insurance policy is $250,000 per person and $500,000 per accident; your homeowner’s insurance policy has a maximum of $500,000. Such limits may be exceeded in case of an accident in which someone is killed or seriously injured, leaving you to pay the excess.
To protect yourself, buy an excess liability (“umbrella”) policy. Typically the annual cost is $120-$150 per year for the first $1 million in coverage and $35-$60 for each $1 million after that. Umbrella policies provide coverage you otherwise wouldn’t have, for libel, slander, or defamation. They’ll pay legal fees in some situations and they also provide protection when you’re traveling.
Ask the agent who handles your auto and homeowner’s insurance for information about umbrellas.