Think of an umbrella policy as an extension of your personal auto and home insurance policies.  In other words, an umbrella policy will cover what your normal auto and home insurance cover (in regards to liability).  So if your car insurance covers a certain accident, but your car insurance policy doesn't have enough liability coverage, your umbrella policy will kick in and help cover the rest.    *Note: as with all things insurance related, each case, company and policy is different. Be sure to read your policy to know exactly what is covered.