Visualize how an umbrella shields your whole person when you're out in the rain. In much the same way, personal umbrella insurance can shield you and your assets from personal liability in case you are hit with a lawsuit that can take away a substantial amount of what you have. In today's litigious society, a lawsuit can be filed against you if you cause an accident with your car or watercraft. And if there is major loss of limb or life resulting from the accident you caused, the possibility that a judge will give the injured party a large award is not at all that remote.

If the insurance policy you already have is not enough to cover the damages you caused the other party, the law may allow the property you have to be seized to pay for the award. And it's not just the award granted by the court to the injured party that you'll have to worry about. Even if the other party does not file a lawsuit against you, your liability insurance will have to pay for things like the cost of his/her medical treatment or the wages he/she might have lost because of the accident you caused. Once the limits of your primary insurance policy have been reached, it is then that you will start to realize the benefits of having personal umbrella insurance.

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A personal umbrella insurance policy can also protect you from non-business activities resulting in charges of slander, false, arrest, libel, and wrongful eviction. And it can also cover the costs of hiring a lawyer and certain court costs. Getting additional liability coverage like this is not as costly as one would think. Many insurance companies offer an affordable stand-alone personal umbrella insurance program, or it can be integrated with another plan.

Of course, it isn't pleasant to anticipate causing an accident or being liable for huge amounts of money. But even though the thought isn't pleasant, it is always wise to be prepared for such an eventuality. The more assets you have, the more you should consider adding personal umbrella insurance to your financial plans. It's an investment with both financial and psychological benefits.

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