Which statement is true about umbrella insurance coverage?

Umbrella insurance coverage is designed to provide an extra layer of liability protection that goes beyond the limits of the underlying policies, such as homeowners or auto insurance. This type of insurance can help cover claims that exceed the limits of those policies, offering additional financial security and peace of mind. It can protect individuals from significant financial losses resulting from lawsuits, accidents, or other liability claims.

The concept of an umbrella policy is to fill in the gaps where other insurance coverage may fall short, making it particularly valuable for anyone who might be at risk of large claims due to their assets or activities. Therefore, the assertion that it provides additional coverage above the limits of underlying policies accurately reflects the purpose and function of umbrella insurance.

The other options do not accurately describe umbrella coverage; for instance, it's not mandatory, it does not exclusively cover property damage and typically includes liability protection, and while high-net-worth individuals often purchase it, it is available for anyone seeking more comprehensive coverage.