An umbrella policy provides coverage on top of your primary insurance policy. So, for example, if you have $500,000 in bodily injury coverage through your auto insurance and you are hit with a $1 million judgment after a car accident, you are exposed to paying $500,000 out of your own pocket. An umbrella policy would provide additional coverage up to $1 million or $2 million, whatever you purchase.
It’s very inexpensive and very smart to purchase an umbrella policy. You need to evaluate your family situation, your property, and your assets that are at risk and take that into consideration. Get as much as you can reasonably afford as you consider those factors.