What an Umbrella Policy Is, and Why We Look for One

Insurance on top of insurance

An umbrella policy is extra liability coverage that sits on top of someone’s auto or homeowner’s policy. When a claim is bigger than the underlying policy will pay, the umbrella picks up where the other policy stops.

Umbrella policies are usually sold in increments of $1 million. They are not expensive for the coverage they provide, and many homeowners and professionals carry one without thinking much about it.

Why it matters to an injured person

Most injury cases are capped, in practice, by the at-fault driver’s policy limits. Many drivers carry only the minimum, and a serious injury can be worth many times that.

If the driver who hit you has an umbrella policy, that ceiling can move by a million dollars or more. For someone with a life-changing injury, that is the difference between a recovery that covers the future and one that does not.

Why nobody mentions it

The other driver’s auto insurer will tell you about the auto policy. It has no particular reason to tell you about a separate umbrella policy, which may be written by a different company entirely. The driver may not think to mention it, or may not want to.

That is why it has to be looked for.

How it is found

• Ask in writing. Before a lawsuit, a lawyer can ask the at-fault driver and their insurer to disclose all policies that may apply, including any umbrella or excess coverage. Many will answer, especially when the injuries are serious.
• Look at who the driver is. A homeowner, a business owner, a professional, or someone driving a company vehicle is more likely to have umbrella or excess coverage, or an employer’s policy, behind them.
• Use discovery if a lawsuit is filed. Once a case is in court, California law allows a party to obtain the existence and contents of any insurance that may pay a judgment, including the carrier and the limits of the coverage (Code Civ. Proc. § 2017.210).

Other policies worth looking for

Umbrella coverage is not the only place money can come from. An employer’s policy can apply if the driver was working. A vehicle owner’s policy can apply if the driver was using someone else’s car. And your own uninsured and underinsured motorist coverage can apply when everything else falls short.

Finding every policy early is one of the most valuable things done in a serious case.

Talk to Boyd

If you were badly hurt and have been told the other driver’s insurance is all there is, that may not be true. The consultation is free, and Boyd takes the call himself: (714) 656-2400.