What is an umbrella policy primarily designed to cover?

An umbrella policy is primarily designed to provide additional liability coverage that extends beyond the limits of the insured's primary insurance policies, such as homeowners, auto, or other liability insurance. This means that if a claim exceeds the limits of these primary insurance policies, the umbrella policy kicks in to cover the excess amount. This coverage is particularly important for individuals who have significant assets to protect, as it helps mitigate the risk of being financially exposed in the event of a major liability claim.

The option addressing amounts over primary policy limits accurately reflects the intended purpose of an umbrella policy, which is to offer supplemental coverage in scenarios where traditional policies may fall short. This type of policy can include a range of liabilities, thus enhancing financial security against substantial claims that could otherwise lead to significant out-of-pocket expenses.