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The more your earning power and net worth increase, the more you have at risk, and therefore, the more you need to protect. If you think you need at least a million dollars of additional protection above your current homeowners or automobile liability limits, you can purchase something called excess liability. Often referred to as an umbrella policy, excess liability is the additional protection you need in case a judgment against you exceeds the liability limits of your existing auto or homeowners policy. Available in amounts ranging from one to five million dollars, excess liability coverage increases your personal liability limits by adding protection to your current auto, boat or homeowners policies. At Moran Insurance we have contracts with Carriers that will offer up to 100 million in umbrella coverage.
Why liability coverage from your homeowners and auto policy may not be enough
Homeowners insurance provides a minimum of $100,000 liability coverage (the coverage that protects you when people are injured or property is damaged due to circumstances in which you or your family are responsible). Although it varies widely by state, typically minimum liability limits for auto insurance are around $25,000 per person and $50,000 per accident.
With both of these coverages you can purchase higher limits of liability protection…but the most that can be purchased is $500,000 for homeowners policies or $250,000 per person, $500,000 per accident for auto insurance. Again, this may not be enough protection in today’s lawsuit frenzied environment where million dollar judgments are fast becoming the rule rather than the exception, even for seemingly minor situations. You never know how much a judge will award.
Available in amounts ranging from one to five million dollars, excess liability coverage increases your personal liability limits by adding protection to your current auto, boat or homeowners policies. Also, if something is not covered in your homeowners policy (like libel), and it’s not specifically excluded in the excess liability policy, you’re covered.
Excess liability coverage provides:
How it works
Depending on the type of accident, your homeowners, auto or boat policy liability limits are used up first, then the excess liability or umbrella policy covers all remaining costs (up to the amounts of coverage you purchased). For example, if your neighbor was on your deck and it collapsed and broke his neck, your homeowners liability coverage would pay for the first $100,000 in damages or whatever your homeowners liability limit was. Your excess liability or umbrella policy would cover the rest (including associated legal fees) up to the one million dollar policy amount that you had purchased.
Most companies require that you carry certain limits on your primary insurance policies (homeowners, auto and boat) in order to receive excess liability coverage. For example, a company may require the following primary liability limits: $300,000 for homeowners, $250,000 per person/$500,000 per accident for auto and $300,000 for boat/yacht coverage.
Often, insurance policies are defined not by what they cover, but by what they don’t. This is especially true for excess liability products. If something is not specifically excluded, you’re covered. Exclusions vary widely by company. Here are some common exclusions: