What is an umbrella insurance policy intended to protect against?

An umbrella insurance policy is designed to provide an extra layer of protection against liability costs that exceed the limits of other insurance policies, such as homeowners, auto, or boat insurance. This type of insurance covers a wide range of liability claims, including bodily injury, property damage, and certain lawsuits, making it a valuable safety net for individuals with significant assets to protect. For instance, if you cause an accident that results in damages greater than your auto insurance policy can cover, an umbrella policy can kick in to cover the additional costs, helping to safeguard your financial stability. This added layer of protection is particularly important as it can defend against claims that might arise from situations that are not fully covered by standard insurance policies.