Personal Umbrella Insurance in Alabama
Protection That Goes Beyond Your Primary Policies
A serious accident can create financial consequences that go well beyond the limits of a standard home or auto insurance policy.
Personal umbrella insurance is designed to provide an additional layer of liability protection above qualifying underlying policies. Depending on the insurer and coverage selected, excess uninsured/underinsured motorist protection may also be available to help protect you when another driver causes a serious accident but does not have enough insurance.
At Bates, Roberts, Fowlkes & Jackson Insurance, we help Alabama individuals and families look at the bigger picture—your vehicles, home, watercraft, drivers, assets and liability exposures—so you can make informed decisions about additional protection.
What Is Personal Umbrella Insurance?
A personal umbrella policy generally provides additional liability coverage after the applicable liability limits of qualifying underlying policies have been reached, subject to the umbrella policy’s terms, conditions and exclusions.
Underlying policies can include auto, homeowners and certain other personal insurance policies, depending on the insurer.
For example, if a covered auto accident results in a liability claim that exceeds the liability limit on your auto policy, an umbrella policy may provide additional coverage above that underlying limit, up to the umbrella policy limit.
Umbrella Liability: Protection When You Are Responsible
One of the primary purposes of personal umbrella insurance is to provide additional liability protection when you or another insured person is legally responsible for a serious covered loss.
Depending on the policy, umbrella liability may provide additional protection for qualifying claims involving:
- Serious auto accidents
- Injuries occurring on your property
- Certain watercraft-related liability claims
- Certain rental property exposures
- Personal liability situations covered by the policy
- Legal defense costs, subject to policy terms
Umbrella coverage does not replace your underlying home or auto liability insurance. Insurers generally require certain minimum underlying liability limits before an umbrella policy will apply.
Excess Uninsured/Underinsured Motorist Coverage: Protection When the Other Driver Doesn’t Have Enough Insurance
There is another side of the liability conversation that is easy to overlook: What happens when you are seriously injured because of someone else’s negligence, but that driver has little or no insurance?
Uninsured motorist (UM) and underinsured motorist (UIM) coverage on an auto policy can help protect eligible insureds when an at-fault driver has no insurance or insufficient insurance, subject to policy terms.
Depending on the insurance company and policy, excess UM/UIM coverage may be available in connection with an umbrella or excess policy. This can extend eligible UM/UIM protection above the applicable underlying auto policy limits.
Availability, limits and requirements vary by insurer, so excess UM/UIM should be specifically discussed rather than assumed to be automatically included with every umbrella policy.
Umbrella Liability vs. Excess UM/UIM
These coverages address two very different sides of a potentially serious accident:
Umbrella Liability
Helps provide additional protection when you are legally responsible for a covered injury or property damage claim that exceeds the applicable underlying liability limit.
Excess UM/UIM
When available and selected, can provide additional protection for eligible insureds when another at-fault driver has no insurance or does not carry enough insurance to address a covered loss.
Looking at both sides can provide a more complete discussion of personal liability and auto-related financial risk.
A Simple Example
Imagine you are involved in a serious auto accident.
In one situation, you cause the accident and the resulting covered liability claim exceeds your auto policy’s liability limit. A qualifying personal umbrella policy may provide additional liability protection above that limit.
In another situation, another driver causes the accident and you suffer significant covered injuries—but that driver carries little or no insurance. Your own UM/UIM coverage may become important. If excess UM/UIM protection is available and selected, it may provide an additional layer above the applicable underlying UM/UIM limit.
The exact response depends on the policies, limits, facts of the loss and applicable coverage terms.
Who Should Consider Personal Umbrella Insurance?
Umbrella insurance isn’t only for extremely wealthy households. A significant liability claim can affect income, savings and assets.
It may be worth discussing additional liability protection if you:
- Own a home
- Have savings, investments or other assets
- Have a higher household income or future earning potential
- Have teenage or young drivers
- Own multiple vehicles
- Own a boat or other watercraft
- Own rental property
- Have a pool, trampoline or other higher-liability property exposure
- Frequently host guests
- Want liability limits beyond those available on your primary policies
Why Teen Drivers Can Make an Umbrella Review Especially Important
Adding a newly licensed driver changes more than your auto insurance premium. It can also change your household’s overall liability exposure.
When a teen or young driver is added to the household, it can be a good time to review auto liability limits, uninsured/underinsured motorist coverage and whether a personal umbrella policy should be considered.
Rather than looking at the auto policy by itself, Bates can help you evaluate how the pieces of your personal insurance program work together.
How Much Umbrella Insurance Should You Carry?
There is no single limit that is right for every household.
When evaluating umbrella limits, factors may include your assets, income, future earnings, vehicles, household drivers, property ownership, watercraft, rental properties and other liability exposures.
The goal is not simply to select a large number. It is to understand the risks you are protecting against and choose limits appropriate for your individual circumstances.
What Policies Work With an Umbrella?
A personal umbrella policy may sit above qualifying underlying policies such as:
- Personal auto insurance
- Homeowners insurance
- Condominium or renters liability coverage
- Watercraft insurance
- Certain rental property liability policies
The umbrella insurer may require minimum underlying liability limits. Those requirements should be reviewed when the umbrella policy is purchased and whenever an underlying policy changes.
When Should You Review Your Umbrella Coverage?
Consider reviewing your umbrella and excess liability protection when you:
- Purchase a home or additional property
- Add a teenage or new driver
- Purchase another vehicle
- Buy a boat or watercraft
- Purchase a rental property
- Add a pool or other significant property feature
- Experience a meaningful increase in income or assets
- Change insurance companies on an underlying policy
- Have not reviewed your liability limits in several years
Why Work With Bates, Roberts, Fowlkes & Jackson?
Bates, Roberts, Fowlkes & Jackson has served insurance clients since 1963.
As an independent insurance agency, we can help clients evaluate their entire personal insurance program rather than looking at one policy in isolation.
That is especially important with umbrella insurance because the coverage works in conjunction with underlying policies and required limits.
Our team can help you understand umbrella liability, available excess UM/UIM options and how your home, auto, watercraft and other personal policies work together.
For us, insurance is personal.
Personal Umbrella Insurance FAQs
A personal umbrella policy generally provides additional liability protection above qualifying underlying insurance policies, subject to policy terms, exclusions and required underlying limits.
The terms are sometimes used interchangeably, but policy structures can differ. Some umbrella policies may provide broader coverage than the underlying policy in certain situations, while an excess policy may primarily provide additional limits. The actual contract should be reviewed.
Not automatically. Depending on the insurer and policy, excess uninsured/underinsured motorist coverage may be available, optional, limited or unavailable. It should be specifically reviewed with your insurance professional.
When available and selected, excess UM/UIM coverage can provide an additional layer of eligible protection above applicable underlying UM/UIM limits when an at-fault driver has no insurance or insufficient insurance, subject to policy terms.
Umbrella insurers typically require minimum underlying liability limits. If your current policies do not meet those requirements, limits may need to be increased.
Umbrella insurance can be relevant to households at many financial levels. Liability claims can affect current assets, savings and potentially future income. The appropriate coverage depends on your individual exposure.
Eligible household members may be covered under a personal umbrella policy, subject to the policy’s definitions, requirements and exclusions. Household drivers should be accurately disclosed and reviewed.
Certain watercraft liability exposures may qualify under a personal umbrella policy when the underlying watercraft policy and limits meet insurer requirements. Eligibility varies.
The appropriate amount depends on your assets, income, household drivers, properties, vehicles and other liability exposures. An insurance professional can help you evaluate those factors.
Look at Both Sides of Your Liability Protection
Liability protection isn’t only about what happens if you cause a serious accident. It is also worth considering what protection you have if someone else causes a serious accident and does not have enough insurance.
Bates, Roberts, Fowlkes & Jackson can help you review your underlying liability limits, personal umbrella options and available excess uninsured/underinsured motorist protection as part of your overall personal insurance program.
Let’s look at your coverage together and determine whether an additional layer of protection makes sense for you.
Bates, Roberts, Fowlkes & Jackson Insurance
1812 6th Ave S
Birmingham, AL 35210
(205) 956-0563