If you have a home or auto insurance policy, it includes some protection against losses from being sued over an incident occuring on your property or while operating your vehicle. But the coverage provided by these policies isn’t always enough, leaving you exposed to covering the rest of your liability with your own assets.

That’s where an umbrella policy comes in. Umbrella insurance refers to liability coverage that goes significantly beyond what your other policies cover, providing extra protection against potential financial losses if someone sues you, and covering your whole family.

Examples of where liability insurance would kick in include someone slipping on your front walkway and suing for their injuries, a lawsuit over your dog biting someone, a family suing you for their child being hurt while at your home, or your teenager causing a car accident that results in more damage or lawsuit payouts than your auto policy limits will cover.

In short, umbrella policies cover injury to others and damage to their possessions that are either caused by your family or that occur on your property. It does not, however, cover your own possessions and injuries.

While it might seem unlikely you’ll be sued for more than your auto and homeowner insurance covers, accidents can happen to anyone. In addition, the cost of umbrella insurance is generally very affordable, giving it a low cost-benefit ratio compared to what you could lose in a lawsuit. Though premiums vary by state, $1 million of coverage typically costs just $150 to $300 per year.

Deciding whether or not to purchase liability insurance is a personal decision, and speaking to your agent who already provides your home and auto insurance is the place to start. For many, it’s a small price to pay for peace of mind and sound sleep.