Most of us have heard of  umbrella insurance, but may not be sure what it is.  No, it has nothing to do with carrying an umbrella in case it rains.  Umbrella insurance is a way to protect you and your family from anything that is not covered in your other insurance policies or to cover you in case your other policies have reached their limits.

One example that shows the importance of umbrella insurance would be a lawsuit that you lose.  Any citizen can be sued by anyone and often, whether rightly or wrongly, someone loses a civil court case and is forced to fork out money.  If you don't have the money or refuse to pay, the plaintiff may put liens on your property or assets to get their money.  You could lose everything, but if you have an umbrella insurance policy, you could be covered up to $5 million.

One problem in obtaining umbrella insurance may be that you current coverage
for cars or your home is bought from several entities.  Individual insurance companies may refuse to give you an umbrella insurance unless you buy all your policies through them.  And, the insurance company may also require you to keep a minimal limit of coverage on other policies.

Fortunately, buying umbrella coverage is cheap so it should not overextend your personal budget.  When deciding how much money to buy coverage for, you may want to add up to at least the value of all your assets.  If your estate is worth $200,000, you should at a minimum purchase $200,000 worth of coverage.  It may be smart to up that amount.

The beauty of umbrella coverage is that it can pretty much cover you financially for anything unexpected.  An example would be if you are falsely arrested or imprisoned.  Contact your insurance agent to find out details of purchasing an umbrella insurance policy.  Remember, million dollar lawsuits may not happen often but you never know....