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For those based in and around Folsom, CA, umbrella insurance provides an extra layer of liability protection that extends beyond the limits of standard insurance policies, such as home or auto insurance. Certain underlying policies must be met before you can acquire an umbrella policy. Certain underlying policy requirements must be met before limitations can be met. These requirements must be put in place before the umbrella policy takes effect.
What Underlying Policy Requirements Mean
To be eligible for umbrella insurance, you must first hold specified amounts of liability coverage through your current insurance policies, such as homeowners, renters, or auto insurance. Termed as underlying policies, these primary policies must meet certain minimum liability limits before an insurance provider will issue an umbrella policy.
For example, an insurance company might stipulate that you have at least $250,000 in liability coverage on your auto insurance policy and $300,000 in liability coverage on your homeowners policy as prerequisites for purchasing umbrella insurance. If these limits aren’t met, the insurer might deny coverage or necessitate an increase in your primary liability limits before issuing the umbrella policy.
Why Underlying Requirements Exist
These underlying policy requirements are in place to ascertain that policyholders maintain sufficient insurance on their primary policies. Umbrella insurance is designed to provide excess coverage, not to replace or fill the gaps in your primary insurance. With these minimum requirements, insurers can mitigate their risk. They are assured that primary policies will cater to smaller claims, while the umbrella policy only comes into play for larger claims exceeding the underlying limits. By keeping your underlying policies up-to-date, you are eligible for legal protection umbrella insurance makes youT.D. McNeil Insurance Services For Better Understanding of Insurance
T.D. McNeil Insurance Services provides comprehensive information on insurance matters. Servicing locations in and around Folsom, CA, our agency is ready to help. Contact us today.
