Do umbrella liability policies typically only cover losses insured by the primary insurance?

Umbrella liability policies are designed to provide additional coverage beyond the limits of primary insurance policies, such as homeowners or automobile insurance. This means that they can cover losses that are not only insured by the underlying primary policies but can also extend to certain liabilities that may be excluded by those policies.

The purpose of an umbrella policy is to fill gaps in coverage and provide added protection against large claims or lawsuits that could exceed the limits of basic insurance. For example, if a primary policy covers up to a certain limit but a claim exceeds that amount, the umbrella policy can step in to provide additional coverage. Furthermore, umbrella policies may also cover certain risks not typically included in standard primary insurance, thus enhancing the overall level of protection for the insured.

This flexibility and additional coverage capability is a key feature of umbrella liability policies, making them valuable assets for individuals looking to safeguard their financial wellbeing against unforeseen liabilities.