Excess Liability Insurance
 

My excess liability insurance company (Electric Insurance Company) which is (was) affiliated with GE has decided to exit the business. I've had this insurance for many years and thankfully never had action requiring use. However, in this litigious society one never knows.

Other than cost, does anyone know if there is any significant advantage in the various companies that offer this type of insurance?

I have never heard of it. What does it cover?

I would read all the fine prints and lawyers jargon. IMO you will fine that most insurance has some many loopholes you’re lucky to get them pay penny and that’s usually after so many years to even pay that. :duck:

Is this possibly the same as an Umbrella Policy which covers excess needed liability.

[QUOTE=JGVillages;2306689]Is this possibly the same as an Umbrella Policy which covers excess needed liability.[/QUO

Yes, commonly called Umbrella Policy. Normally pick up liability beyond what is selected on your house, cars, boats etc. They usually specify the base level required on your policies for home, auto etc and allow you to select the added liability you want to cover.
i.e. If you were judged to be responsible for $500,000 and had a auto policy covering $300,000. They would cover the balance. Without the coverage, you would have to cover the excess from your own assets. You select the top level of coverage.

An Umbrella liability policy can be purchased from most large insurance companies such as State Farm, Allstate, Travelers and Hartford. In addition an independent insurance office such as The Villages Insurance is certainly a place to get a quote as they represent several insurance companies capable of underwriting such insurance policies. Other Independent Insurance offices can do the same.

[QUOTE=mtdjed;2306695]I don't have an umbrella policy, but I do have $500,000 liability on my homeowners insurance and $1,000,000 on my auto insurance. Before buying another umbrella policy, I would suggest shopping around to find insurance companies that will sell you higher coverages than other companies. For example, my auto insurance is with State Farm, but when I was shopping, I found that many companies, like GEICO, will max out your liability coverage at $250K. You will save money by using a company that will sell you high liability limits, and avoid an umbrella policy. To me, auto insurance liability is way more important than homeowners insurance liability.

I’ve had umbrella insurance for decades. Probably 1 of the most needed policies you will need if something happens. When you buy individual insurance policies, you can vary the limits of liability between each policy. Not true with an umbrella. Every policy must meet the standard limits then the umbrella takes over after that.
When you hear commercials from the ambulance chasers (lawyers) that get $500,000 to millions on a settlement, anything above the policy you are paying for, will come out of your pocket. So if you cause injury and the lawyer sues you for $1M and your insurance policy has a $300k limit, then you are responsible for the remaining $700k.
I wouldn’t leave home without it!

Consider buying Umbrella Insurance from the same company you have your Homeowner's and Auto insurance with. Administratively, it keeps things simple. Also, there can be no finger-pointing, if a claim is made, as to which company will cover the claim. There could be a multi-line discount also.

golf cart liability
 

Good idea to have a liability policy on your golf cart also.
The way some drive like maniacs, they're in for a world of litigation and financial hurt if they kill a pedestrian or bicyclist - or fellow cart-er.

I have had as large an umbrella policy as State Farm would provide me with for over 50 years. I have increased the coverage over time. If one's net worth is sizable as it tends to become with age and/or inheritance it is worthwhile protecting. People having significant net worth can be liability lawsuit targets. Anything can and does happen in liability lawsuits. My policy helps me sleep at night.

Question. Does your umbrella policy cover things other than your own liability? For example, does it cover an uninsured motorist claim that you have made against your own auto insurance company for a hit and run accident where you were injured by an uninsured driver, but no one is suing you?

I am not going to dig it out and check but I also have always maintained uninsured motorist coverage, growing up in New Mexico where the roads have always been and remain replete with uninsured drivers. I maintain homes in three states and vehicles in two of them. Ever since my torts class in my first year of law school I have loaded up on liability insurance.

Excess vs. Umbrella
 

No RP has made the correct distinction between excess coverage and umbrella. However, in the context of homeowners and auto, it doesn't matter.

Excess insurance is just that: an increase in the limits or dollar amount of the primary or underlying insurance. Usually, true excess insurance is "following form". This means that the terms of the policy follows the form of the underlying or primary insurance and the extension of coverage, the exclusions, the terms and conditions, the definitions etc are the same as in the underlying policy. An excess policy could be written on one page of paper saying that it adopts every word in the underlying policy with the exception that the limits are increased to $XXXX.

In contrast, an umbrella policy includes excess insurance and provides new and different coverages. Technically, I suppose that an umbrella policy would not have to increase the limits of the underlying insurance, but I've neither seen nor heard of one that did not.

The term "umbrella" is used to describe insurance that covers those claims that would ordinarily not be covered by the underlying policy or even excluded by the underlying policy. It is useful to think of it as an umbrella over the heads of the insureds to protect them from claims that they might think would be covered by the underlying policy but are not.

Some of the common claims that are covered by a personal lines umbrella are libel, slander, trespass, false arrest, false imprisonment, and assault and battery. This is not to say that everything an insured does that is wrongful will be covered; however, that is too long a topic to correctly address in this posting.

For homeowners, an umbrella policy can provide great benefits. In my 40 years of practice in California, a state in which litigation is a blood sport (as is Florida), I defended numerous claims for an insured under the umbrella coverage. A common case was a homeowner with a litigious neighbor who sues over every perceived wrong. Slander claims are common. The same for trespass. Cut down a tree on the property line and be sued by the neighbor.

Perhaps the greatest benefit of an umbrella policy is that it can afford a homeowner a good attorney to defend him/her in a lawsuit and the means to have investigators and experts, if needed, paid for by the umbrella carrier. If you haven't been involved in litigation, you will be shocked at the cost of defending even the most frivolous lawsuit given the fees of the attorney, the court, the investigator etc.

Another advantage of an umbrella that is not often considered is that an inexperienced attorney for your opponent can "plead" the insured into coverage. For example, the insured can sue a contractor for not doing a job correctly. Most likely, the insured will have previously complained to the county building department or to another contractor. In response, the contractor and his attorney thinks that they can "bully" the homeowner by cross-complaining for libel and slander and for additional charges.

The unintended effect of the cross-complaint is that the contractor has "pled the homeowner into coverage" if the homeowner has an umbrella policy. In that case, the umbrella carrier will defend the slander claim; however, the rule in most every jurisdiction is that when a carrier has to defend any part of a claim, it has to defend all of the claim, although it would only pay a judgment for slander. As the alleged slander is that the contractor did the work wrong, the defense is that the allegation was true. Thus, the homeowner gets a full defense from his umbrella carrier and all the experts needed to prove that the contractor did the work improperly.

Suffice it to say, it is well worth the money to have an umbrella policy in addition to homeowners and auto policies.