In the world of insurance, an umbrella policy is an added layer of personal liability protection. You may have seen personal liability on your home and auto insurance, the coverage that protects you financially and covers third party injuries. An umbrella policy provides an additional limit to that coverage that kicks in once those primary limits are exhausted. Personal umbrella policies are relatively inexpensive for the amount of coverage they offer. Typically, only costing a few hundred dollars a year for a million dollars of coverage.