An example of when you might need Umbrella Insurance is in the event of an auto accident with you or another member of your family behind the wheel. Icy conditions send you careening into an oncoming car. Passenger(s) in the other car are injured and sue you. In a court of law a judge awards them $1,000,000 in damages. Your auto policy has a limit of $250,000. The balance of the amount awarded by the judge would be paid by your umbrella policy. Without the umbrella policy a judgment could be placed on your home and other assets. Another example would be a visiting child falls on your property and is injured. The parents sue you for $1,000,000. Your Homeowners policy has a liability limit of $300,000. The balance here again would come from your umbrella coverage.