Lawsuits had proliferated and the amounts awarded had been steadily increasing. A standard car insurance policy would have only limited liability coverage. If a person having the policy is involved in a serious accident with the mistake on his/her side, the costs of negligence might far exceed the liability coverage of the present policy or policies. It would never be possible to predict the award by the judge to the person injured in the accident, since this could vary depending on the extent of injury. As such, it is recommended that umbrella insurance should be taken by every person, not just the wealthy persons alone, as had been the practice in the past.
When a person takes umbrella insurance, it would provide an additional protection against liability over and above the limits on the car insurance policies. Depending on the insurance company, a particular person might be able to have an enhanced liability protection to the tune of one to five million. This protection would come into effect when the liability on the current policies had already been exhausted.