Umbrella Policy
Definition:
Extra liability insurance that extends beyond the limits of a standard homeowners or auto policy.
Explanation:
Umbrella coverage provides higher liability protection and may cover situations excluded from other policies.
Example:
If a guest sues you for $1 million after an accident on your property, an umbrella policy may cover the amount exceeding your homeowners liability limit.
Why it matters:
This term affects how claims are handled and what payout a homeowner may receive.