Umbrella insurance is usually sold in $1 million increments, and it increases the limit of liability policies to provide extra coverage. Some liability is already built into existing insurance policies, such as homeowners insurance, auto insurance, and any other boat/RV policy. However, the liability limits on these policies tend to be dangerously low. A small accident can easily stay within these liability limits. However, a large accident, or an accident involving a fatality, can easily exceed these coverage limits. Having an umbrella insurance policy in place provides a much higher liability limit, protecting policyholders from risks and financial responsibility.