What is the main benefit of personal umbrella insurance?

Personal umbrella insurance primarily serves to provide additional liability coverage beyond what is offered by standard underlying policies, such as homeowners, auto, and boat insurance. This insurance kicks in when the policyholder has reached the liability limits of their other insurance policies. For example, if an individual is involved in a serious car accident that results in damages exceeding their auto insurance coverage, the umbrella policy can help cover the excess amount, protecting the insured from significant financial loss resulting from lawsuits or claims.

This additional layer of protection is particularly valuable because it can cover various incidents, including personal injury, property damage, and certain litigation costs that may not be included in the underlying policies. Thus, having an umbrella policy can represent a crucial safety net against large claims and lawsuits that could otherwise jeopardize a person's financial stability.