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Umbrella Policy

An umbrella policy is a type of insurance policy that kicks in after other insurance has been exhausted. For example, typical auto insurance covers up to $250,000. If you get sued and lose a judgment in excess of $250,000, your insurance won't cover the additional amount.

Most insurance companies that offer insurance also offer umbrella policies.
Today there are an increasing number of lawsuits and most homeowners, auto, and watercraft policies have a limit on liability insurance. While "conventional wisdom" used to be that umbrella insurance was just for wealthy individuals, that's no longer true. Today, it makes sense for average drivers, as well.

With an umbrella policy, depending on the insurance company, one can add an additional $1-5 million in liability protection beyond the liability protection on other current policies has been exhausted. Typically, it is relatively inexpensive because an umbrella policy does not kick in until after an initial policy is exhausted. 
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