Which statement best describes the role of umbrella policies?

Umbrella policies are designed to provide additional liability coverage beyond the limits of your primary insurance policies, such as homeowners or auto insurance. This means that if you experience a claim or lawsuit that exceeds the coverage limits of your primary insurance, the umbrella policy will kick in to cover the excess amounts. This additional layer of protection is especially important for individuals who have significant assets to protect, as it can help prevent major financial loss in the event of severe claims.

The other options do not accurately reflect the function of umbrella policies. They are not mandatory, nor do they eliminate the need for primary insurance; instead, they supplement it. Umbrella policies also do not solely cover legal fees; while they can include coverage for legal expenses related to a claim, their primary role is to provide broader liability coverage. Therefore, the choice that best describes the role of umbrella policies is that they provide additional coverage for claims exceeding a specified limit.