Question

An "umbrella" as it relates to insurance:

A) Is the maximum amount that can be paid for all claims during a policy period
B) Is insurance coverage purchased to supplement primary coverage
C) Is the maximum amount that will be paid in the event of a single claim
D) Is the amount of insurance provided by a traditional insurance policy

Answer 1

An umbrella insurance policy is insurance coverage purchased to supplement primary coverage.

Step-by-step explanation:

An "umbrella" as it relates to insurance is B) Is insurance coverage purchased to supplement primary coverage. An umbrella insurance policy provides additional liability coverage beyond the limits of a primary insurance policy. It provides protection against excess claims on top of what is covered by the primary policies, such as homeowners or auto insurance. For example, if someone has a car accident and their auto insurance policy only covers up to $50,000 in damages, but the damages exceed that amount to $100,000, an umbrella policy can cover the remaining $50,000.