Umbrella Policy Coverage for Equity or Asset Value?

[Eric H.]

If you don't have an LLC set up and are using an umbrella policy to protect yourself from liability do you want a policy limit greater than or equal to the amount of equity you have in your properties or greater than or equal to the property values?

Let's say you own 10 houses worth 200k each which equals 2 million. You only have 40k equity in each which is 400k equity. Let's ignore other assets for this example.

Would you want an umbrella policy covering 500k or 2 million?