In an age of common litigation, those with assets often prefer to be well insured. But the liability coverage on your homeowners insurance is limited to certain kinds of claims as is your auto insurance. Rather than raise the limits on all such policies, it makes sense to carry a single umbrella policy that covers all of these risks.
Because your other policies cover the most common claims, your umbrella policy has few claims and tends to be inexpensive for sizeable amounts of coverage, often in the million dollar class or more.
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