Umbrella Liability Insurance provides additional coverage when your personal liability coverage under an automobile and homeowners policy ends.  Adequate liability coverage will protect you from a legal judgment against your future income.  When purchasing Umbrella Liability Insurance, consider the following:

• Purchase an amount at least equal to your net worth, and any additional legal costs for your defense.  Typically, umbrella liability insurance is purchased in one million dollar increments.
  
  
• Coverage is usually coordinated with auto and homeowners coverage.  Therefore, it may only be available to you through your primary property and casualty insurer.  The annual premium for a one million-dollar policy should be less than $200.
  
  
• If the policy stipulates that the cost of your legal defense will be subtracted from the face value of the policy, consider increasing your coverage.
  
  
• Be sure that the policy has provisions for the coverage of children who are away at college and a provision for the payment of claims that arise from damages caused by your pets and animals.
  
  
• Find out whether the policy requires disclosure of potential liabilities to the insurer.