:: Additional Liability Insurance

 

Your home, auto or boat policies all have a base limit of liability coverage. This liability coverage protects you in the event you do something to someone else. It pays if you injure someone or damage their property. 

The insurance industry offers a level of coverage over these base limits. This coverage is called “excess liability” or an “umbrella.” While these both offer additional layers of liability coverage in increments, or layers, of $1 million, there is a difference between the two. 

Excess coverage is just additional liability coverage. So, if you have $500,000 of liability coverage on your home policy and $1 million of excess coverage and someone drowns in your pool and received a judgement against you for $1.5 million, the home policy pays $500,000 and the excess policy pays $1million. The claim is paid in full. The excess policy provides ONLY liability coverage and NO other coverage. 

An umbrella provides not only additional layers of $1 million of coverage, but they also offer additional uninsured and underinsured motorist coverages. While liability coverage protects others for what you might do to them, the uninsured and underinsured motorist coverages protect you in the event you are injured by someone without coverage (uninsured) or not enough coverage (underinsured). 

These issues can get quite complicated so it is important to understand what you are buying and to also to buy what you need.