What is an Umbrella Policy?


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question 1 of 3

Which of the following is true of an umbrella insurance policy?

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1. Jerry has a $3,000,000 umbrella policy. He is involved in a car accident and is found to be responsible for $400,000 in property damages. His car insurance liability limit is $300,000. How much money will his umbrella insurance policy pay out in this case?

2. Which of the following reasons explains why umbrella insurance policies can be competitively priced?

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About This Quiz & Worksheet

This quiz and worksheet will test your understanding of the basics of umbrella policies. To pass the assessments, you have to be familiar with the pricing of umbrella insurance policies, claims paid by umbrella policies, and other concepts covered by the lesson.

Quiz & Worksheet Goals

You will be tested on

  • Why umbrella insurance policies can be competitively priced
  • Claim type that is paid immediately by umbrella insurance policies
  • Purpose of purchasing an umbrella insurance policy as it relates to asset protection

Skills Practiced

  • Information recall - access the knowledge you've gained regarding facts about umbrella insurance policies
  • Reading comprehension - ensure that you draw the most important information from the lesson on umbrella policy basics
  • Problem solving - use acquired knowledge to solve insurance policy pay out calculation practice problems

Additional Learning

Learn the basics of umbrella policies by reviewing the lesson What is an Umbrella Policy?. The following objectives are covered:

  • Define asset protection
  • Know what situations umbrella insurance covers
  • Understand the process of purchasing umbrella insurance