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Simple English definitions for legal terms
umbrella policy
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A quick definition of umbrella policy:
An umbrella policy is a type of insurance policy that covers losses that exceed the limits of other insurance policies. It's like having an extra layer of protection in case something really bad happens. For example, if you get into a car accident and the damages are more than what your car insurance covers, your umbrella policy can help cover the rest. It's important to have an umbrella policy if you want to make sure you're fully protected.A more thorough explanation:
An umbrella policy is an insurance policy that covers losses that exceed the basic or usual limits of liability provided by other policies. For example, if you have car insurance and someone sues you for more than your policy limit, an umbrella policy can cover the additional amount. It is like an extra layer of protection.
Another example is if you have homeowner's insurance and someone gets injured on your property and sues you for more than your policy limit, an umbrella policy can cover the additional amount.
Umbrella policies are useful because they provide additional coverage for unexpected and costly events. They are often purchased by people with significant assets to protect.