Umbrella or Excess Liabiility

Umbrella Insurance: Excess Liability to Protect Your Assets

Homeowners insurance and auto insurance carry a certain amount of liability coverage. But an incident could occur in which you need more liability than offered by your policy. Umbrella insurance is a type of excess liability coverage you can get to help with your existing liability coverage. It would pay what remains after the other liability coverage is exhausted.

In short, an umbrella policy increases your liability coverage. For instance, you might owe $100,000 in damages following an auto accident. But your auto liability is only $50,000. When you have an umbrella policy, then your insurer pays the remaining $50,000 if you have enough coverage. If you have less than $50,000 then the insurer will pay up to the policy limits.

Is Umbrella Insurance Necessary?

It depends on your financial situation. If you have valuable assets to protect, then you might want to consider umbrella coverage. Or if you’re at high risk for being sued, then you also might want to consider this coverage. But if you feel your existing liability is enough to handle anything that might happen, then you probably don’t need extra coverage.

The Specifics of How Coverage Works

The person making the claim will contact your insurer. You might end up in court or have to make an out of court settlement. The insurer will pay the damages you’re ordered to pay. But the insurer will only pay up to the limits of your policy. If any balance remains, you’ll need an umbrella policy to pay the rest. If you don’t have umbrella coverage, then you’ll pay what remains out of pocket.

Coverage Options

You can purchase the amount of coverage that you want. Just remember that you must already have some form of liability coverage before you can get an umbrella policy.


The main benefit of umbrella insurance is that it gives you access to excess liability protection. And if an incident should occur, you’ll have help paying any damages that you owe. Without good liability, you could lose your assets should you owe thousands of dollars in damages.