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Consumers may choose to purchase an umbrella policy if their home or car is more expensive than a typical policy would be able to cover. For example, most car insurance liability policies cover at least $25,000 per person or $50,000 per accident. But if the accident involves a very valuable car, or the victim is willing to pursue legal action, insurance may not even begin to cover the full cost. You may want to hedge your risk by purchasing umbrella insurance to add extra protection to your existing policy. Insurance Claims Basics To receive a payout for an insurance policy, the policyholder must file a claim with the insurance company. The basics of the process are straightforward, but can vary depending on the type of insurance.