Umbrella insurance works with your auto insurance policy and your homeowner’s insurance policy. Its purpose is to provide extra protection for you and to fill in any gaps in your other policies.

Umbrella insurance is usually indicated when liability is involved. For example, if someone is injured on your property and sues you, the liability insurance under your homeowner’s policy would pay. If the liability insurance in your policy was not enough to cover the settlement, the umbrella policy would be activated and may pay the remainder of the judgment.

Umbrella insurance is usually set up to cover you for $1 million, $2 million, or $5 million. This amount is paid in addition to what your other policies cover in liability.

Umbrella liability insurance is relatively inexpensive, with the price determined by the amount of coverage you want, the price that the issuer charges, and the “personal risk factors” you carry (for example, past traffic violations or the status of your credit report).

It is easy to underestimate how much umbrella liability insurance you might need. Consumers may think that $1 million in coverage is more than enough, but fail to realize that settlements are often much larger.

If you buy your auto, homeowner’s, and umbrella policies through the same insurance company, you may receive a discount. You will also ensure smoother coordination should you have to file a claim, since you will be dealing with the same insurance company for all three of your policies.

You can find additional information about umbrella insurance from the following companies:

-- Geico www.geico.com/getaquote/umbrella

-- Safeco Insurance of America www.safeco.com/personal/umbrella-insurance/default.aspx

-- Nationwide Mutual Insurance Company www.nationwide.com/umbrella-insurance-policy.jsp