What might be a reason to use umbrella insurance?

Umbrella insurance is specifically designed to provide additional liability coverage beyond the limits of your standard insurance policies, such as home or auto insurance. The primary purpose of this type of insurance is to offer an extra layer of protection against major claims or lawsuits that can exceed the standard coverage limits. For example, if a covered event leads to a lawsuit resulting in damages that exceed the limits of your home or auto policy, umbrella insurance can cover the excess amounts, protecting your assets and savings.

This additional protection is particularly valuable for individuals who may have significant assets, as high-limit liability claims can arise from various situations, such as accidents, injuries, or property damage. By having umbrella insurance, individuals can safeguard against unexpected financial losses.

In contrast, the other choices do not accurately represent the functionalities of umbrella insurance, as they pertain to incorrect assumptions or misunderstandings regarding its purpose or benefits.