In short, personal liability umbrellas exist to provide you with more liability protection than is offered through car or home insurance policies.
Your car and your home insurance both provide liability coverages in the event that you do harm to someone, or even if someone claims you harmed them and sues.
For example, if you cause an accident with major injuries, your car policy will defend you and pay damages up to a set dollar amount. But sometimes that amount is not enough!
Let’s say you caused $225,000 worth of medical injuries to someone, but your car policy has a set limit of only $100,000. The insurance company will pay $100,000 of medical costs–that’s good– but what about the additional $125,000? The other party may sue you to recover that money. After all, you caused the accident.
That’s where an umbrella policy can come into play. It offers an additional one million or more of liability coverage beyond that provided by your car and home insurance. That way, if you get sued for amounts that exceed your car and home insurance amounts, you’ll have better protection.