Question

A personal umbrella policy gives liability coverage to replace that which would normally be needed by an automobile or homeowner's policy. t/f

Answer 1

A personal umbrella policy supplements, rather than replaces, the liability coverage of an automobile or homeowner's policy, providing extra protection after other policy limits are exhausted.

Step-by-step explanation:

The statement that a personal umbrella policy gives liability coverage to replace that which would normally be needed by an automobile or homeowner's policy is false. A personal umbrella policy is not a replacement for automobile or homeowner's insurance. Instead, it provides an additional layer of liability protection above the limits of an insured's homeowners, auto, or watercraft personal insurance policies. This means it kicks in when the liability limits of these other policies have been exhausted.