An umbrella policy provides extra liability protection above and beyond what your underlying personal insurance policies cover. For example, if you carry a $100,000 liability limit on your homeowners policy but experience a liability loss of $500,000, you would be responsible for the additional $400,000. An umbrella policy, if purchased, would cover the difference. Coverage usually starts at $1,000,000 and is relatively affordable. An umbrella policy is an excellent idea for individuals who own many assets they would like to protect.