Umbrella policies supplement liability coverage you already have through your home and auto insurance and provide an extra layer of protection for anyone who has assets that might be at risk if they cause a serious accident. Certain umbrella policies also provide coverage if you face liability from your service on a board of a civic, charitable or religious organization. Although umbrella policies are relatively inexpensive, the question remains as to whether you really need one. Before making a decision, compare the umbrella premium with the cost of raising the liability limits in your homeowner's or auto policies.

If you were ever sued, your standard home owner's or auto policy will usually provide you with liability coverage which pays for judgments against you and your attorney's fees. However, in this litigious world we live, you may want to have an extra layer of protection. That is what a personal umbrella liability policy provides; it kicks in when you reach the limit on the underlying liability coverage in a homeowner's, renters, condo or auto policy. An umbrella policy will also cover you for things such as liable and slander. If you feel insecure with the amount of insurance you have, then you should consider purchasing a personal umbrella liability policy. For about $150-200 per year, you can buy a $1 million personal umbrella liability policy, the next million will cost about $75 and $50 for every million after that. Because the personal umbrella policy goes into effect after the underlying coverage is exhausted, there are certain limits that usually must be met in order to purchase this coverage. Usually the typical minimum required on homeowner's liability is $100,000. The auto liability minimum is usually about $100,000 bodily injury per person with $300,000 bodily injury per occurrence and $25,000 property damage. Talk to your insurance agent about more information on liability insurance.

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