What is an umbrella?

Aside from the umbrella that protects you from the rain, most people have no idea what an umbrella liabilty policy is for. An umbrella policy covers all of your insurance policies (i.e. auto, home, business, etc.) under one higher limit of liability. For example, lets say you have an auto policy and a home policy with $300,000 in liability limits. If you have an at-fault accident and your limits are exhausted, then the rest would be paid out of your pocket. If you have an umbrella liability policy of $1,000,000 then the umbrella would step in and cover any additional costs over what your auto or home policy would cover. In todays society where people continue to be sue happy, then an umbrella policy is extremely cheap insurance. Most people that have 1 house, and 2 cars will pay around $250/ year for $1,000,000 in liabilty protection. Don't risk your assets or your future earnings and make sure that you are adequately protected.