No one wants to pay for insurance they don't need. Most people go a lifetime without being sued, so the idea of buying more than basic insurance against lawsuits ("Liability Insurance") may seem unnecessary. But the legal expenses you'll incur if you ever are sued can rack up fast, and there is a (remote) chance your assets could be at risk in a worst case scenario. Check your auto and property policy to see what your liability coverage limits are.
If you have assets and you carry less than $100,000 (per accident) in auto liability limits and less than $500,000 under your home policy, get a few quotes for raising your limits and/or adding umbrella coverage. United Policyholders contributed information on this topic to the upcoming June 2011 issue of Money magazine.
What's under "umbrella" insurance? Perhaps not the true love the Hollies sang about in "Bus Stop", but umbrella coverage gives you a decent amount of protection at a relatively low cost. For around $300 per year you can buy a million plus dollars of lawsuit protection. If you own a house or other real estate or substantial liquid assets such as stocks and savings or if you host a lot of parties, it's definitely worth considering.
When does umbrella insurance kick in? If someone is injured on your property or in a car accident you're involved in, and they file a lawsuit against you and if the amount you're found to owe them is more than your liability insurance limits, that someone can put a lien on your hard or liquid assets. Umbrella insurance will protect you in that situation by giving you extra coverage for both legal fees and the judgment.
If you ever have a question about insurance, enter a few key words into the search box at www.uphelp.org You'll find articles and tips on everything from sewage backup coverage to travel and long term care insurance.