What does an umbrella policy primarily provide?

An umbrella policy primarily provides coverage for risks and exposures that are not included in the base policy. This means that it acts as an additional layer of liability protection, extending beyond the limits of underlying policies, such as homeowners or auto insurance.

For example, if a policyholder faces a significant liability claim that exceeds the coverage limits of their primary insurance, the umbrella policy can provide additional coverage, helping to protect the insured's assets from being depleted in the event of a lawsuit or significant financial loss.

Umbrella policies are particularly valuable because they cover various situations that may not be covered by the primary insurance, like personal liability in certain scenarios or legal defense costs, which can be substantial. Therefore, the correct answer emphasizes the comprehensive nature of an umbrella policy in addressing gaps in coverage that the base policies might leave unprotected.