Lawsuits are currently commonplace. Attorneys are making more generous financial awards than ever. There is a liability insurance cap on homeowners', auto, and watercraft policies. Do your current policies provide you with enough liability insurance to pay your fees for carelessness if an unfortunate catastrophe occurs that is your fault? Umbrella insurance is no longer only a luxury for the wealthy but rather a necessary form of security for all policyholders because no one can forecast how much a judge will grant the injured party.

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The purpose of umbrella insurance is to provide additional liability protection beyond the purview of homeowners', auto, and personal watercraft insurance policies. Depending on the insurance provider, an umbrella policy can increase liability protection by 1–5 million. This protection is designed to pick up where the liability on other current policies has been used up.

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Liability insurance is a type of insurance that pays for expenses related to injuries, such as medical bills, rehabilitation, and lost wages. It also covers the costs associated with a legal defense should the negligence of the at-fault person end up in court. After adding these up, the standard liability coverage on a homeowners’ or auto policy often isn't enough. Almost every state has financial responsibility laws that will hold drivers accountable for the damages they cause.