Alberta General Insurance Level 1 Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

Umbrella insurance is specifically designed to provide excess liability coverage that goes beyond the limits of standard policies, such as homeowners or auto insurance. This type of insurance serves as a supplementary policy to help protect an individual from large claims or lawsuits that could exceed the liability limits set in their primary insurance policies. For example, if a person is found liable for damages in a lawsuit that surpass the coverage limit of their auto insurance, umbrella insurance can pick up the excess amount, thereby safeguarding the insured's personal assets.

This type of coverage is particularly valuable because it not only increases the liability limits but can also cover certain claims that may not be included in standard insurance policies, such as libel or slander. The goal is to provide an additional layer of financial protection against potential significant claims, allowing individuals to manage their risk more effectively.