The umbrella is excess to all your underlying insurance policies. The premium on the umbrella is based upon the underlying risks. So if you have 2 cars, 2 houses, a boat and a golf cart, you get charged accordingly.
All the underlying "exposures" ( boat, golf cart etc) are required to be insured for specific underlying limits. Usually something along the lines of 250/500/50 for auto and golf cart policies. Maybe 500K for a HO policy liability limits. (all carriers have different underlying limits requirements, these are just an example) So when you get an umbrella you list all the exposures you intend to be covered and meet the required underlying limits of the primary policy for each underlying exposure. Two houses get covered if limits met and premium adjusted accordingly. Remember, it's a liability coverage excess policy. If for some reason you have a car or whatever, not meeting the underlying required limits, the umbrella won't apply.
Yes, in Florida your house can not be attached in a bankruptcy proceeding. That is why OJ Simpson resided here to avoid the Goldman's getting his house in their civil suit. However, you would have to be crazy to not insure your house under an umbrella to save a couple of hundred dollars a year for such a reason.
In addition, umbrella policies provide very broad coverage for things such as libel and slander in addition defense costs in lawsuits brought against an insured which may not be covered by some underlying policies.
Umbrella policies will also provide uninsured and underinsured (UM/UIM)coverage to protect the insureds who are injured by uninsured or underinsured liable parties. It' wise to add those coverages to the policy also. They aren't "automatically" included as the umbrella is primarily a third party liability coverage while UM/UIM is "first party" coverage.
I never sold this stuff, just handled a lot of claims and made decisions a long time ago to always have an umbrella policy protecting me and my family.
|