Why is umbrella insurance called secondary insurance?

At Kingston Insurance Agency LLC, we want our clients to understand their insurance and how it works. When you read a policy document that refers to umbrella insurance as secondary insurance, you might wonder what that means.

Primary vs. Secondary

A primary insurance policy covers a piece of property with multiple coverages, such as structural, personal property, and liability in a South Kingstown, RI home or RV policy. A secondary policy offers added coverage of one type in the primary policy that enhances its coverage. Umbrella, a secondary liability policy, adds to the individual’s or business’s liability coverage, so when the primary policy pays out fully, the umbrella policy pays any remaining costs up to its policy limit.

Which Policies Qualify as Primary for Umbrella Coverage?

Any policy that includes a liability component can serve as your primary policy to qualify a policyholder for umbrella policies. You can add umbrella coverage to any of the following primary insurance policies:

  • Homeowners
  • Renters
  • Motorhome
  • Auto
  • Recreational toys (ATVs, dune buggies, etc.)
  • Business liability.

Umbrella only adds more liability coverage.

Why Add More Liability Coverage?

Even if you maximize the liability coverage on the primary policy, it may not offer enough to cover the settlement for an accident for which authorities found you at fault. With a single night’s hospital stay costing $8,000 on average, an auto accident or a pool accident can cause high medical bills that you must pay. A court may award the injured a 

judgment for pain and suffering, which you also must pay. The umbrella insurance ensures you don’t have to pay out of pocket.

Contact Us to Start Your Umbrella Policy

Contact Kingston Insurance Agency LLC, serving the South Kingstown, RI area with the insurance it needs. Let us help you add umbrella insurance to your primary policies to improve your financial security. Call or email us today.