Umbrella or Excess Liability


What Is Umbrella Insurance?

We can explain umbrella insurance by first discussing the homeowner’s insurance and auto insurance. You have liability coverage for both types of insurance listed above, and you may be determined to be responsible for damages or injuries resulting from a car collision that you caused. Your auto insurance policy would pay the injured party up to the limits of your policy. If the courts require you to pay an amount higher than your insurance policy will pay, you would be responsible for paying that amount in full on your own.

An umbrella insurance policy increases the amount of liability insurance that you are carrying. If someone gets hurt on your property and your homeowner’s insurance doesn’t cover the person’s bills in full, your umbrella policy will cover the rest. If you injure someone in a car collision and your auto insurance policy isn’t sufficient to cover all of the bills, the umbrella insurance policy will cover the excess.

Who Is it for?

Umbrella insurance is for anyone with assets to protect.

How Does It Work?

If you cause a car collision, the injured party will file a claim against your auto insurance policy. The policy will pay up to the previously specified limits. If, for example, the injured party’s medical bills exceed the limit of $30,000, your auto insurance company will only pay $30,000. Then, your umbrella policy will pay the amount that is left over.

Different Types of Coverage in Existence.

An umbrella insurance policy can cover the medical bills for those injured in a collision that you cause. It also provides an amount for rehab if the injured party needs it as well as a sum of money for lost wages. The umbrella policy also provides money for your legal defense if the injured party takes you to court.

Major Benefits.

The major benefit of umbrella insurance is the money that you will save if someone gets hurt on your property or in a car accident that you caused. The limits of your homeowner’s insurance policy may not cover all of the injured party’s medical bills. Your auto insurance may not cover all of the property repair bills and medical bills. In both cases, you may be required to sell your property to pay the injured victims. With umbrella insurance, this does not occur.