Umbrella insurance has an unusual name, but it’s a simple concept–it’s an extra liability policy for added peace of mind.
Most commonly, umbrella insurance is something you get in addition to either a car insurance or homeowners insurance policy.
Umbrella insurance is specifically about liability, which is the cost you might have to pay to somebody else for an unfortunate event where you are held responsible. It doesn’t usually include losses you bear yourself, such as if your property is damaged or your possessions are stolen.
You’d usually get umbrella insurance when your main insurance policy has liability coverage limits that are too low for your needs. Umbrella insurance will only pay out when your main policy has already paid out in full, and it will only pay out the remainder of your costs.