An Umbrella Policy (also known as an Excess Policy) is another type of insurance coverage which you can purchase separately in addition to regular car insurance policy. The umbrella policy supplements your regular insurance policy by providing additional coverage for existing liability, uninsured or under-insured policy. The policy will be used if your regular insurance is exhausted on a given claim. This policy will essentially provide a second layer of protection.
Generally, it is common to see an umbrella or an excess policy in the context of homeowner’s insurance. However, it should be noted that not every umbrella policy may also provide auto coverage. This will depend on the insurance carrier you are using and it is recommended to ask your carrier what kind of coverage the umbrella policy will provide.
As a practical matter, if it is within your financial means to have additional coverage, the umbrella policy will benefit you if an accident occurs.