What is umbrella insurance and do I need it?

Umbrella insurance is extra liability coverage that kicks in after your standard home, auto, or boat insurance limits are exhausted. For example, if you cause a car accident resulting in $600,000 in damages but your auto policy only covers $300,000, your umbrella policy covers the remaining $300,000. It also covers certain claims not included in standard policies, like libel or slander. Whether you need it depends on your financial situation. If you have significant assets like savings, investments, or property, you're a bigger target for lawsuits and have more to lose. It's also worth considering if you have a pool, trampoline, or teenage drivers. Policies typically cost $150 to $300 per year for $1 million in coverage, making it relatively affordable protection.