Umbrella insurance provides an additional layer of personal liability protection. A single umbrella policy covers all underlying policies you own (auto, home, motorcycle, boat, etc.) and kicks in if the liability limits on these policies are exhausted. Umbrella insurance refers to liability insurance that is in excess of specified other policies and also potentially primary insurance for losses not covered by the other policies.
Anyone who owns assets that exceed the liability coverage included in primary vehicle or property insurance should consider a personal umbrella policy. These assets can include home equity, college and retirement savings, a second home, stocks and bonds.