An extra liability insurance policy that provides coverage beyond the limits of your existing auto, home, or business insurance. Umbrella policies typically offer $1 million to $5 million in additional protection and are relatively inexpensive for the amount of coverage they provide. They activate when the limits of your underlying policies are exhausted.
Understanding umbrella policy is important for Canadian insurance consumers because it directly affects how your coverage works and what you can expect when you need to use your insurance. This is a foundational insurance concept that applies across multiple types of coverage and is worth understanding regardless of what insurance you carry.
If you have questions about how umbrella policy applies to your specific insurance needs, speaking with a licensed insurance broker can help clarify your options and ensure you have the right level of protection.
Your auto policy has a $1 million liability limit. You are found at fault in a serious accident with $1.5 million in damages. Your umbrella policy with a $2 million limit covers the additional $500,000.
A licensed insurance broker can explain how umbrella policy applies to your specific situation and help you find the right coverage.
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