Umbrella insurance is a special kind of liability insurance. It goes above and beyond your normal home owners, auto, or other personal insurance policies to provide you with additional protection. This is liability insurance which means it covers you if you cause damage to another person or his property. Should you be sued for an amount that exceeds your policy, the umbrella liability insurance will kick in to cover damages. It is usually available in increments of one million dollars.
Let’s say your auto insurance covers you for up to $200,000 for injuries you cause to others. If you own a one million dollar umbrella policy, then you would be covered up to $1,200,000.
In addition to increasing the dollar amount of liability coverage, an umbrella policy will also cover you for things not normally covered, such as libel or invasion of privacy.