Umbrella vs. Excess Policy

In a survey of people with assets of $5 million and up, 1 in 5 did not have a personal umbrella policy.

As a Financial Planner, you most likely ask your clients if they carry an umbrella policy. While that’s an important question to be asking, it may not be enough. In fact, we have 3 questions that you should be asking every client when it comes to their personal insurance.

1. Do you have an excess policy or a true umbrella?

Most umbrella policies are broader in coverage and give the added benefit of an extra layer of liability. These policies start with $1 million and go up in million dollar increments.

An excess policy does nothing to the terms of your other insurance policies - it simply raises the limit of liability you have available for a claim. Think of this policy as dollars held in reserve if a claim exceeds the limits you currently have available under your regular home, auto or recreational vehicle policy.

2. Do you have the correct underlying limits?

If your client fails to meet the minimum requirements of their personal umbrella, they will be responsible for paying the difference.

For example:

  Underlying Limit Required $300,000
  Actual Limit Carried by Insured $100,000
  Gap $200,000

3. Are you aware that your savings and other assets could be at risk?

The risks involved with not having the correct coverages in place can be detrimental to your clients. If your client winds up in a situation where they can’t financially cover a claim, there is the potential for their wages to be garnished, a lean to be attached to their home or savings, or their future earnings to be attacked.

At R&R Insurance, our goal is to properly protect our clients and ensure they have adequate coverage, such as a personal umbrella policy. As a partner of yours, you can rest assured knowing your clients and their families will be protected today, tomorrow and in the years to come. For more information, contact a Knowledge Broker in our Private Client Division.

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