What is the primary benefit of "umbrella insurance"?

The primary benefit of umbrella insurance is that it provides additional liability coverage beyond the limits of other policies. This type of insurance acts as a financial safety net, extending coverage when the liability limits of your underlying policies—such as homeowners or auto insurance—are exhausted. For example, if you were involved in a car accident that caused significant damage or injury, and the resultant claim exceeds your auto policy's liability limit, your umbrella insurance can cover the remaining amount, safeguarding your assets and future earnings from potential lawsuits.

This layer of protection is particularly important for individuals with substantial assets, as it helps ensure that they are not left vulnerable to significant financial loss in the event of unexpected legal claims. Umbrella insurance is designed to provide peace of mind, knowing that you have the necessary coverage for situations that could lead to large liability claims that typical policies may not fully address.