Ideally, your insurance policy would provide the exact amount of coverage you need regardless of the loss. However, that isn’t always the case. In some situations, you may need additional coverage. Both umbrella and excess coverage riders can increase the limits on an existing policy, but they are not the same thing. You should understand the differences between umbrella vs. excess coverage before deciding which one is right for you.
Differences Between an Umbrella Policy and Excess Coverage
Despite those similarities, there are some substantial differences between umbrella and excess coverage policies. One of the most notable is that an umbrella policy can extend coverage limits on multiple policies at once where excess coverage only increases limits on one at a time. An umbrella policy can also broaden the type of coverage offered by a specific policy. That extension could bring an otherwise uncovered incident under the scope of your insurance policy.
Similarities Among Them
Despite their differences, these two types of coverage share some similarities. For example, both umbrella and excess coverage insurance increase policy limits beyond their stated maximums. They both can also be applied to multiple types of insurance policies.
You will need to decide which type of policy best fits your needs. It is helpful to work with a knowledgeable insurer to ensure you fully understand the pros and cons of each before making a decision.