What does a personal umbrella policy provide?

A personal umbrella policy provides extra liability coverage above the limits of underlying policies, such as homeowners or auto insurance. This type of insurance is designed to protect individuals from major claims and lawsuits that could exceed the liability limits of their primary insurance policies. For instance, if an individual is found liable for a large damages claim resulting from an accident, their auto insurance may have a coverage limit that is insufficient to cover the full extent of the damages. The personal umbrella policy would kick in to provide additional coverage, ensuring that the individual is protected from significant financial loss.

The other options do not accurately describe the function of a personal umbrella policy. It does not extend health insurance coverage, offer supplemental coverage for medical expenses, or act as disability insurance; instead, its primary function is to enhance liability protection, making it an essential consideration for individuals seeking robust financial security against unforeseen liabilities.