This type of insurance protects you if you are sued or cause damage to someone else. Your homeowners and auto policies have liability insurance built into them, but the coverage may not be sufficient.

The typical auto policy, for example, may have a maximum liability limit of $300,000 per accident, although your limit could be as low as $15,000 if you bought a bare-bones policy. If you cause an accident that results in $1 million of medical bills for someone else, you could be sued for the difference.

That’s why insurance experts recommend you have liability insurance equal to at least twice your net worth — if you’re highly paid or seen as a possible lawsuit target (that means you if you’re a doctor, a lawyer or any kind of public figures).

Most auto and homeowners policies have an upper limit of coverage of $500,000, so if you need more coverage you’ll probably need to buy a personal liability or so-called umbrella policy. This policy extends over your existing coverage like an umbrella, kicking in after your auto or homeowner coverage is exhausted.

Umbrella policies are one of the best-kept secrets in the insurance world. They’re relatively inexpensive, so insurance agents don’t make much of a commission selling them. But for $150 to $300 a year, depending on where you live, you can get $1 million of coverage — and peace of mind.