If you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage. It will pay for judgments against you and your attorney’s fees, up to a limit set in the policy. But you may want to have an extra layer of liability protection, which is what an umbrella policy does.
The personal umbrella policy goes into effect after the underlying coverage is exhausted, so there are certain limits that must be met in order to purchase this coverage. Most insurers will want you to have a minimum of $250,000 of liability insurance on your auto policy and $300,000 of liability insurance on your homeowners policy before selling you umbrella liability for $1 million of additional coverage.
This amount does vary by carrier, however, for about $150 per year, you can buy a $1 million policy. The policy can be increased in million dollar increments.
Umbrellas generally provide additional liability coverage for the following underlying policies: