What is umbrella insurance?

Umbrellas: More Liability Protections

An umbrella is a form of insurance policy that adds additional liability coverage to a group's underlying coverage. It adds restrictions on liability. It's not coverage of land. Automobile coverage is typical $500,000 in liability coverage, like homeowner's insurance.

The umbrella is a symbol of protection.

If one has lots of money, they will want higher-limited security. That would cover them in major litigation. Personal insurance plans will expand the limits of cars, houses, rental properties, bikes, jet skis, etc. It's overriding. It's called an umbrella. Many actors and other wealthy people have $10 million or higher limits to cover them. How much worth does a person have in this lifetime? Maybe they're an umbrella. Underlying coverage of the highest limits may be required, or slightly below maximum limits may be needed for an additional premium. It is type coverage, and it also protects the underlying coverage. Any coverage may be applied to the underlying coverage so that it may have its deductible, called a "drop down."

Commercial umbrellas are somewhat similar to personal umbrellas, except for general commercial liability, auto liability, and workers' compensation. If a vendor does business with them, some municipalities and big corporations need them, or a contractor would work for them. They will need high limits. Excess liability plans are also available, often from the same insurance provider offering the policy. The difference is that coverage protects the policy it's written on, so it's not a proper umbrella. It's also the form below, but its character is more constrained.

keywords