Which of the following is considered a loss that umbrella insurance would cover?

Umbrella insurance is designed to provide an additional layer of liability coverage that goes beyond the limits of your primary insurance policies, such as homeowners or auto insurance. This type of insurance is particularly beneficial because it can cover legal expenses, medical bills, and damages associated with claims that exceed your standard liability policy limits.

The correct answer, regarding legal fees above primary policy limits, is a prime example of how umbrella insurance works. If you face a lawsuit resulting in legal fees that exceed the cap of your primary liability coverage, the umbrella policy steps in to cover those excess costs. This provides invaluable financial protection and peace of mind in situations that could lead to significant financial loss.

Options referencing loss of property due to theft and losses from an excluded primary policy do not align with what umbrella insurance covers, as these scenarios typically involve standard property insurance or may be excluded outright from coverage. Additionally, while general liability insurance claims may overlap with situations involving umbrella insurance, they do not directly represent the excess coverage function of umbrella policies as effectively as the legal fee situation does.