What is a unique feature of Umbrella coverage in insurance?

Umbrella coverage is designed to provide an additional layer of liability protection that extends beyond the limits of standard homeowners, auto, and other primary insurance policies. This unique feature allows policyholders to safeguard their assets in the event of a lawsuit or significant claim that exceeds their existing coverage limits. For example, if someone is injured on your property and the legal expenses, medical costs, or settlement amounts surpass your regular policy limit, umbrella coverage can step in to cover the excess, up to the cap of the umbrella policy.

This type of policy does not focus solely on property damage or provide coverage for named perils, which are specific risks identified in a policy, nor is it designed to serve as a replacement for primary insurance. Instead, umbrella coverage complements existing liability policies, allowing individuals to pursue more comprehensive protection against significant financial risks. Therefore, its core distinguishing feature is the way it enhances liability limits beyond what standard insurance policies offer.