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Key Takeaways. Umbrella insurance is a type of personal liability insurance that covers claims in excess of regular homeowners, auto, or watercraft policy coverage. Umbrella insurance covers not just the policyholder, but also other members of their family or household. How an Umbrella Insurance Policy Works - Investopedia investopedia.com https://.investopedia.com › articles › personal-finance investopedia.com https://.investopedia.com › articles › personal-finance
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