Umbrella Insurance
Definition
Additional liability insurance covering lawsuits exceeding your home and auto insurance limits. Provides $1M+ protection for ~$100-200 per year. Protects assets if someone sues you for a serious injury on your property.
Why It Matters
If you own assets (home, investments, high income), umbrella insurance is cheap protection. A $5M lawsuit could wipe out your net worth without it. Most people overlook it but it's essential.
Example
Someone gets injured at your house, sues for $1M. Home insurance covers $300k. Umbrella insurance covers the remaining $700k. Without umbrella, you pay $700k from your pocket.
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