An umbrella policy (also called a personal umbrella policy or a PUP) is insurance that a person buys that will stack on top of their existing insurance.  It might stack on top of their car insurance and their homeowner’s insurance.  By stack on top, we mean that it is in addition to the primary coverage. For example, let’s say somebody has $100,000 in automobile liability insurance to protect tehmself if they cause a car accident that result in injuries. An umbrella policy would provide that person with insurance coverage from the $100,000 level up to another level, likely $1,000,000. This extra level of insurance provides protection in case they’re in an accident.  These types of insurance are only necessary if you have sufficient assets that you need to protect.  It’s just extra insurance. When one is making a claim against someone who caused an accident and there is not enough primary insurance to pay for the damages, you need to make sure there’s not any of this extra insurance out there that could come into play.