Umbrella insurance policies provide an extra level of coverage for the policyholder. An example would be an extra $1 million of coverage for your auto insurance policy and, as a matter of fact, this tends to be the most common option for umbrella coverage. Another common example would be a boost to your normal homeowners’ liability coverage. Many would make the false assumption that a million dollars’ of coverage is excessive and that an umbrella policy is unnecessary. However, you can quickly be disabused of that idea should you be sued for an injury occurring in your home or auto.
This kind of coverage is perfect for those who want protection from the high costs of lawsuits, or from types of liabilities that are not covered by their other insurances. Additionally, legal fees can add up greatly, and umbrella policies can also help to cover those which results from false arrest, slander, and invasion of privacy, for example.
Again, this kind of coverage is useful to protect you against catastrophic financial losses, expensive legal costs, and the holes in other insurance policies. Lawsuits can exceed standard policy limits by hundreds of thousands of dollars, sometimes very quickly, and the peace of mind provided by this umbrella coverage can be a big advantage.