Homeowner’s Insurance – Umbrella Coverage

This is another type of excess liability insurance that is not part of a car insurance package. The policies are often issued by the same insurance company, but they are truly different policies. The homeowner’s umbrella is excess coverage that pays over and above the auto liability policy. The liability insurance coverage on the insured driver’s auto policy must be fully exhausted before the umbrella coverage can be accessed. The umbrella policy is essentially extra coverage available to pay for damages caused by the homeowner. It only opens and pays benefits in serious injury claims that exceed the value of all available auto liability coverage.

Umbrella policies are wonderful fund sources, and they typically carry $1,000,000.00 in additional benefits to cover victim claims. This coverage is pure excess, meaning that the coverage is not reduced by the amount of the liability payout. The clue that tells us there is likely umbrella coverage is an underlying auto liability insurance policy with coverage limits of $250,000.00 per victim, $500,000.00 per accident. Umbrella insurance providers typically insist on this higher level of auto liability insurance to keep the umbrella policy affordable. If we see the $250,000.00 per person limit, there is a very strong likelihood that additional umbrella coverage exists.

If the value of your claims exceeds the limit of coverage available on all available auto liability insurance policies, always look for homeowner’s coverage for every driver or vehicle owner who can be held legally responsible for your damages. If the opposing parties will not cooperate with full voluntary disclosure of insurance sources, a simple suit filing will allow you to force disclosure through the court’s discovery process.