What is an umbrella policy and do I need one?

An umbrella policy provides additional liability coverage beyond what your homeowner's and auto insurance policies offer. It typically starts at $1 million in coverage and costs $150 to $300 per year for that amount. You may need one if you have significant assets to protect, own a swimming pool or trampoline, have teenagers who drive, or frequently host guests. An umbrella policy also covers certain claims that your standard policies may not, such as libel, slander, or false arrest. It is relatively inexpensive for the additional protection it provides.