Personal Umbrella

It's Raining, Are You Carrying An Umbrella?

Okay, you have a policy for your home and the cars driven by your family. You have just the right policy for the apartment you rent out to others as well as special coverage for your boating excursions. Your homeowner's policy even has a special form to cover the activities connected to the business that your spouse runs out of your home. Yes, it looks like you can breathe a sigh of relief and be confident that you have all the coverage you need. Or should you have an umbrella? An umbrella is the term for a liability policy that covers your other, primary liability coverage on an excess basis (and often to provide coverage's that aren't available under the primary coverage). Umbrellas generally provide additional liability coverage for the following underlying policies:

Personal Automobile
Homeowners/Farmowners
Recreational Vehicles
Personal watercraft;
Landlord Liability
Doesn't "Excess" Mean Too Much?

Not in the case of carrying umbrella coverage. Umbrellas are designed to be carried over a person's primary or underlying liability coverage. A person's primary coverage is typically part of his or her personal automobile or homeowner's coverage. Primary refers to the fact that in the event of a loss, the liability portion of your auto or homeowner coverage is the first to respond, that is they respond on a primary basis. Umbrellas or excess liability policies respond to an eligible loss only after the primary insurance has paid its limit. It's quite possible that your primary insurance limits provide more coverage than you'll ever need. However, loss circumstances could result in primary coverage that's not covered by a policy. For instance, your newly licensed child is driving the family car and slides on an icy highway. He ends up causing a chain collision damaging several cars and injuring a dozen drivers and their passengers. If you don't have enough primary coverage, any shortage may have to come out of your personal assets.