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Umbrella or Excess liability insurance is a separate insurance policy that provides additional liability insurance limits above your auto and liability policies. Typically umbrella/excess insurance provides a minimum $1,000,000 of additional liability protection, critically important in the event a lawsuit is brought against the insured. Umbrella/excess coverage limits can range between $1,000,000 to as high as $5,000,000; or even higher. This valuable coverage is put in place to protect the assets you own should you be sued for an accident or incident.   The level of coverage you choose should be based on the value of your assets or future earning potential.  To qualify, minimum underlying coverage limits must be in place in order to purchase an umbrella/excess policy. Typically, auto and liability insurance policies require a minimum of $500,000 for auto policies and between $500,000 and $1,000,000 for personal liability coverages. 

Once in place an umbrella/excess policy provides and additional level of protection ($1,000,000 or more) above the auto and liability coverages you already have in place. The underlying policy limits are used first, after which the umbrella/excess coverage would apply.  

 Umbrella policies can offer coverage even if no other underlying coverage exists.  Excess policies (sometimes called “following-form excess” policies) provide coverage and extend limits only where other underlying coverage exists.  The Umbrella policy has a self-insured retention (or SIR) amount (what might be considered a deductible) that applies if no other underlying insurance exists.  

 Now who actually needs an umbrella/excess policy? The answer is very simple, anyone who has equity or assets to protect, this even includes retirement accounts. Typically umbrella policies are very affordable and will range in cost from $175 and higher based again on the level of coverage purchased. 

 Liability insurance is one of the most valuable insurance coverages you can purchase. You might be able to overcome the loss of property or even a vehicle, but a large court judgement can ruin even the best laid plans. Take the time to contact your Farm Bureau agent and review all of your coverage and include a discussion about the possible need for an umbrella. You can't wait until you need it to purchase this protection. 

 Content provided by: Terry Manuel, Bulloch County Farm Bureau Agency Manager and Richard Hart, Director of Sales Training for Georgia Farm Bureau Insurance