Why might a person consider obtaining a personal umbrella policy?

A personal umbrella policy is designed specifically to extend liability coverage beyond the limits provided by standard homeowners or auto insurance policies. This additional layer of protection is particularly valuable for individuals who may be at higher risk for lawsuits, such as those with substantial assets or those who engage in activities that could lead to liability claims.

By providing higher liability limits, a personal umbrella policy helps safeguard a person's financial future in the event of a significant claim. For example, if someone is found liable for a serious injury in an accident or a lawsuit due to accusations of negligence, the liability limits of their standard homeowners or auto policy might be insufficient to cover the damages. An umbrella policy would kick in at that point, covering the excess amount and thus helping to protect the individual's savings and assets.

In contrast, while other options mention benefits like coverage for personal items, protection against identity theft, or minimizing insurance costs, they do not accurately describe the specific purpose of an umbrella policy. An umbrella policy primarily focuses on additional liability coverage rather than comprehensive property coverage or cost reduction strategies.