Thanks to our friends at Safeco Insurance for their reminder about this crucial distinction!
The golden rule is: an Excess Liability policy provides additional coverage above your auto/home liability limits, BUT it only covers what is included in the underlying policy. In contrast, a true Umbrella is an OPEN PERILS policy – which means that if something is not specifically excluded, you’re covered.
Do you need examples of where an Umbrella could provide coverage, but an Excess Liability policy would not? How about these:
1) While on vacation, you rent a boat. Out on the water, you crash into another boat, severely injuring a water-skier being towed behind. Neither your home nor your auto policy would cover that …. but an umbrella would.
2) You write a blog post about a bad experience in a restaurant. The restaurant owner sues you for libel. Even if the lawsuit is thrown out of court, you still have to respond …. and that can be expensive. An umbrella would cover your costs.
3) You rent a car while overseas, but get involved in an accident which injures another driver. Your auto insurance all the way back home in Texas won’t cover his hospital bills …. but your umbrella will.
For more information about umbrella policies, or to find out whether your current policy is a true umbrella or merely an excess liability policy, give your friendly agent at Memorial Insurance a call!