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All You Ever Wanted to Know About Insurance

Umbrella Coverage

You have a policy for your home and your family’s cars. You have just the right policy for the apartment you rent out to others as well as coverage for your boating excursions. Your homeowner's policy even has a special, added protection for the business that your spouse runs out of your home. While it looks like you have all the coverage you need; perhaps you should consider…. an umbrella.

Umbrellas are designed to be carried over a person's primary (also known as underlying) liability coverage. Primary refers to the fact that in the event of a loss, the liability portion of your auto or homeowner coverage is the first to respond. Umbrellas or excess liability policies respond to an eligible loss only after the primary insurance has paid its limit.

It is quite possible that your primary insurance limits provide more coverage than you will ever need. However, circumstances could involve a type of loss that is not completely covered by a primary policy, since underlying policy limits are exhausted. For instance, your newly licensed child is driving the family car and slides on an icy highway. He ends up causing a chain collision damaging several cars and injuring a dozen drivers and their passengers, costing $2,000,000 or more in damages. Your underlying personal auto policy only pays $500,000, meaning you have $1,500,000 left to pay out of pocket or with assets. To avoid this, you should have an umbrella policy that would step in and cover the difference. 

 Or maybe you often volunteer to help transport members of your son's first grade class on field trips and you have an accident because you tried to beat a yellow light. If you do not have enough primary coverage, any shortage may have to come out of your personal assets.

Umbrellas generally provide additional liability coverage for the following underlying policies:

  • Personal Automobile
  • Homeowners/Farm owners
  • Recreational Vehicles
  • Watercraft
  • Personal Liability


The additional coverage may often extend to handling related expenses, also on an excess basis, such as the cost of providing a court defense. Call us at 405.521.1600 for more information.