Some homeowners insurance policies do cover civil liability lawsuits such as your dog biting an elderly lady, but only up to a limit. Many homeowners maintain the minimum $100,000 worth of liability coverage. If your civil lawsuit costs you $400,000, a claim to the umbrella policy is made to cover the excess not paid for by the homeowners policy. Ultimately, it can save you $300,000 or more in out-of-pocket expenses.