When you hear “L” for liability, think of “L” for lawsuit.
Excess liability and Umbrella liability policies provide higher liability limits. In order to purchase excess liability or umbrella coverage, you must have reasonable amounts of coverage on the underlying policy(ies).
The underlying coverage minimums to purchase excess liability or umbrella coverage are:
Personal liability: (home coverage or liability coverage added to a dwelling policy) $300,000
Personal auto liability: $250,000/$500,000
Boatowners liability: $250,000
Self-Insured Retention: $250.00 (this is a deductible for liability losses that are not covered by an underlying policy but can still be covered by an umbrella policy. (Not on excess liability policies)
Another way to understand the difference, see the picture below.
