As a home owner if you are ever sued your homeowners policy will provide you liability coverage up to a pre determined amount. This will help pay for any legal judgements against you and your attorneys fees. However you may want to have an extra layer of liability protection. Thats what a personal umbrella liability policy provides.

An umbrella policy is considered supplemental insurance, meaning that the umbrella coverage only kicks in after your basic homeowner's policy has paid up to its limit on your claim. If you have a mortgage, your homeowner's insurance policy likely provides for coverage up to the replacement value of your home. What it does not cover is potential liability above and beyond the limits of your homeowner's insurance. So if your $500,000 property burns down, your homeowner's policy should cover the cost of relacing your home, however any additional liability, for example groundwater contaimination or accidental death or injury or collateral damage to public or private property would not be covered by a basic homeowner's insurance policy. To protect against these unforeseen events, umbrella policies are an excellent, and generally very inexpensive choice to preserve your assets and wealth from costly lawsuits. The Insurance Information Institute estimates that the first $1 million of excess liability coverage costs between $150 to $350 on average, with each additional million costing as little as $100 per year.

In a situation where you are being sued a personal umbrella insurance policy acts as another liability protection layer once your standard insurance has been exhausted.