When shopping for Gambrills, MD insurance, you are likely to come across the terms umbrella insurance and excess liability insurance. While some insurance agents will seem to mention these terms together as though they are the same thing, it’s important to know that there are key differences between these two policy add-ons. Here’s what every insurance buyer should know:
The Basics of an Excess Liability Insurance Policy
An excess liability insurance policy provides the policyholder additional coverage when their underlying liability policy has reached its limits. For example, if your home was damaged in a flood and you need $30,000 to rebuilt but your homeowner’s insurance will only cover $25,000 in damages. If you have an excess insurance policy on that specific homeowner’s insurance policy, then it will cover that remaining $5,000. This type of liability insurance is also popular for business owners who may find themselves facing a lawsuit as an excess liability insurance policy will cover any damages not awarded by a general liability insurance policy.
The caveat is that excess liability insurance can only be attached to one underlying policy.
The Basics of an Umbrella Insurance Policy
An umbrella insurance policy is a specialized type of excess liability insurance that similarly comes into play once an underlying policy has paid out to its maximum. However, unlike an excess liability policy that can only be adhered to one underlying liability policy, an umbrella policy may cover multiple policies such as both general liability and flood coverage. Additionally, umbrella policies are unique in that they provide additional coverage for things that the general policies may not cover at all, such as auto coverage in any country.
Note, however, most umbrella insurance policies will only fulfill claims if and when certain rules are met, such as a set payout limit for an underlying automotive policy.
Learn More at Bay Point Insurance
For more information about these two types of insurance, contact Bay Point Insurance, serving Gambrills, MD and surrounding areas.