Residents living in Amarillo, TX, sometimes need more liability coverage than standard homeowners provide. Whether to protect against incidents on a ranch or just basic accidents at home, umbrella insurance can provide additional protection. Umbrella policies often come with underlying policy limits.

The Role of Underlying Policy Limits

The underlying policy limit is the minimum amount of liability insurance one must maintain on primary insurance policies, such as auto or homeowners insurance before their umbrella policy kicks in. 

This limit ensures that the primary insurance absorbs the initial impact of a claim, with the umbrella policy only providing additional coverage. Maintaining adequate underlying limits is paramount in Amarillo, TX, where liability risks are often significant.

For example, an umbrella policy with a $1 million coverage limit might require underlying policies (auto, homeowners) to have liability coverage of approximately $300,000 to $500,000. This structure ensures that in a substantial claim situation, the primary policy addresses claims up to its coverage limit, followed by the umbrella policy covering additional costs up to its maximum.

While auto and homeowners insurance are some of the most commonly required coverages, an umbrella policy can also have other underlying policy limit requirements. When applicable, policyholders might need ATV insurance, RV insurance, or another policy with a minimum amount of protection.

Make Sure You Have Underlying Limits in Place

To navigate these complexities and ensure you have adequate liability coverage, contacting Nest Insurance Agency is advisable. At Nest Insurance Agency, our knowledgeable insurance agents understand the complexities of umbrella policies. We’ll make sure any requirements that your chosen umbrella policy, including underlying policy limit requirements, are met. That way, you won’t jeopardize your umbrella coverage.