To understand how umbrella insurance works, consider this scenario:
Imagine you're held responsible for a multi-vehicle accident with damages totaling $850,000, but your auto policy covers only $300,000 in liability.
Without umbrella insurance, you must pay the remaining $550,000 out of pocket. However, an umbrella policy could extend your liability coverage beyond the $300,000 provided by your auto policy, covering the additional costs up to the limit you choose (typically from $1 million to $5 million).
In this case, the umbrella policy would cover the remaining $550,000, protecting your assets.
Other Scenarios Requiring Umbrella Insurance
