Want to know what rainy days, beach outings, and insurance have in common? They’re all better with an umbrella.

Both umbrella insurance and excess liability can supercharge your coverage and ensure you’re adequately protected for rainy days and unforeseen accidents.

Whether you run a business or own a home, adequate coverage is essential. But shopping for insurance can get confusing fast. If you’re unsure what the difference is between excess liability and umbrella insurance, keep reading to understand which of these secondary coverage types is right for your needs.

Excess Liability Insurance Increases Your Coverage Limit

Excess liability insurance is secondary coverage that you can get in addition to your primary coverage. The terms of your underlying coverage won’t change, but the excess liability coverage will extend your limit.

If you lodge a claim that exceeds the coverage limit on your primary insurance, your excess liability coverage will kick in. Excess liability insurance is usually available in coverage increments, such as $1 million or $2 million. This allows you to perfectly tailor your limits to your needs, without finding a new primary policy.

Maybe you’ve found the perfect product liability insurance, but the limits are lower than you’d like. Excess liability insurance can boost your coverage limit and protect yourself from paying any excess claims out of pocket.

Umbrella Insurance Expands the Scope of Your Coverage

The main difference between excess liability vs umbrella insurance is that umbrella insurance widens the scope of your coverage. Whereas excess liability insurance increases your total limit, umbrella insurance allows you to broaden your protection to include types of claims not included in your primary coverage.

This flexibility can be beneficial for both personal and business insurance.

For example, let’s say your business coverage is falling behind your company’s growth. The bigger you get, the more comprehensive coverage you’ll need, and commercial umbrella insurance enables you to access broader coverage without changing your primary policy.

Perhaps you’ve recently bought a rental property and realized that you now need both homeowner’s insurance and landlord insurance.

Or, maybe the recent spate of earthquakes is making you question your existing homeowner’s insurance. If your area is prone to seismic activity, extending your coverage to include earthquake damage through umbrella insurance is a good idea. According to reports, the number of homeowners who have earthquake coverage increased from 15% in 2018 to 23% in 2020.

Certain types of umbrella insurance can also extend your coverage limits. If you need excess liability and a wider scope of coverage, umbrella insurance may be the best option.

Insurance premiums have increased, with homeowner’s insurance increasing by an average of 20% since last year. Umbrella coverage can help you get the needed coverage while saving on costs.

Excess Liability vs. Umbrella Insurance in a Nutshell

Excess liability can boost your coverage limits. Umbrella insurance can broaden the scope of your coverage and increase your limits in some cases.

Now that you know the difference between excess liability and umbrella insurance, are you ready to beef up your coverage? Here at Oliver L. E. Soden Agency, we’ve been helping our clients find the perfect personal and business insurance for over 50 years.