Have you ever been caught in a gusty rainstorm, pleased that you remembered to take your umbrella with you, only to have it made useless by a strong gust of wind that turns it inside out and rips the fabric from the ribs? Many golf umbrellas are made with slits that allow strong winds to flow through while still protecting you from the rain. All umbrellas aren’t created equal, and especially insurance umbrellas. Make sure to compare coverage.
An insurance umbrella policy is designed to sit over the top of primary coverage (usually home and auto for personal umbrellas). An umbrella offers additional limits of liability to pay claims and provide defense cost. In some instances the umbrella might offer additional coverage protection beyond what is provided in the primary.
There are two main kinds of “umbrella” insurance policies. The traditional umbrella offers to extend your coverage limits of liability to a certain level. A $1,000,000 traditional umbrella will pay the difference between your primary policy’s limits and $1,000,000 should you become liable. For example; if your homeowners’ policy provided $300,000 liability limits and you purchased a $1,000,000 umbrella policy the umbrella would pay as much as $700,000 should you become liable for that amount.
A following form excess policy provides a full limit of liability to the policy limits, so in the above example the excess liability policy would pay as much as $1,000,000 should you become liable for that in excess of what your homeowners’ policy paid.
On the other hand, a following form excess policy follows the primary policies’ forms. That is to say, the excess policy provides only the coverage provisions that are provided in the primary policies.
An umbrella might, and many times does, pick up coverage that isn’t provided in the primary.
To analyze the coverage difference between the two you need to look at the policy exclusions.
A personal umbrella policy would probably have some or all of the following exclusions (This varies wildly between companies);
- The loss must be fortuitous so the damages that are expected or intended by the insured are not covered.
- Since the policy is “personal” the coverage excludes loss arising out of business or professional pursuits.
- The policy normally doesn’t include loss assumed under contract or agreement.
- Loss is normally excluded arising out of ownership, maintenance, use, loading or unloading of aircraft and non-traditional watercraft such as jet skis, air boats, or air cushions.
- While snowmobiles and golf carts are covered loss arising out of ownership, maintenance or use of most recreational vehicles is excluded.
- Property in your care, custody, or control is normally excluded for loss.
- Loss normally covered under a Workman’s Compensation policy is usually excluded as is loss due to war or insurrection.
The purchase of an “umbrella” or and “excess liability” policy should be discussed with your independent insurance agent. Check the top right of this page for your Local Trusted Authority.
Other Enhanced Insurance articles related to Umbrella Insurance:
Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.
While the majority of people want an agent involved in their purchase of insurance, many people want to see if they can save money by buying direct from the insurance company. Others want to try a direct quote to make sure the premium they’re now paying through their local agent is fair. If you want a quote for your coverage, click on the competitive quote button on the right side of this page.