An umbrella policy is a type of insurance that provides additional liability coverage beyond what is provided by your standard auto, home or other policies. It acts as an “umbrella” over your existing policies and offers extra protection in case you are sued for damages that exceed the limits of your primary insurance. For example, if you are found to be at fault in a car accident where the damages amount to more than what is covered by your auto policy, an umbrella policy would provide additional coverage up to its limit. Umbrella policies typically offer million-dollar protection and can help safeguard your assets in case of a catastrophic loss.