A frequently misunderstood coverage, excess liability is often called umbrella liability because it goes over your home and auto insurance liability, providing an extra layer of liability insurance.
Let’s say you have $500,000 of auto insurance liability and $1 million of excess liability. If you were involved in a serious accident where the total cost was $750,000, the insurance company would pay $500,000 from your auto insurance policy and $250,000 from your excess insurance policy. Without the excess policy, you would be short $250,000. Attorneys would be expecting you to pay that amount from your personal assets.