Personal Umbrella & excess liability

Most states do not impose an upper limit on the amount for which you may be sued in a court of law. For those states that do impose an upper limit it is often well above the average homeowner’s liability limit of insurance. A personal umbrella or excess liability policy provides liability protection to an insured for amounts in excess of the liability limits on their existing homeowner’s, personal auto, or specialty insurance policies. In fact, most personal umbrella policies provide not only higher limits of insurance but also broader insurance coverage than the underlying personal insurance policies. 

Lawsuits arising from personal liability can result in catastrophic settlements that may exceed the insurance limits of existing liability policies. Once the liability coverage under these policies are exhausted, you may be forced to pay a substantial amount from their personal assets. 

Personal umbrella policies typically also provide drop-down coverage, which is in many cases broader than the coverage provided by the underlying homeowner’s, personal auto, or specialty insurance policy. When the underlying insurance coverage does not apply to a particular loss and that loss is not excluded by the umbrella policy, the umbrella coverage drops down to cover the entire loss minus any deductible or self-insured retention