What type of coverage activates after the basic insurance is exhausted?

Excess (Umbrella) Coverage is designed to provide additional protection beyond the limits of basic insurance policies. When the underlying primary coverage reaches its limit due to a claim, excess coverage kicks in to cover the remaining amount. This type of coverage is particularly valuable in instances where liability can exceed basic policy limits, such as in serious accidents or lawsuits.

The purpose of this coverage is to fill the gaps left by standard policies and offer a broader safety net. It usually comes with a higher limit for various types of claims, including liability and damages, making it an important financial tool for individuals and businesses seeking to protect their assets.

In contrast, basic coverage refers to the standard limits and protections in an insurance policy, while general coverage is often not a specific type of insurance term but may refer to broad protections within a policy. Supplemental coverage typically adds to an existing policy's protections but does not function in the same manner as excess (umbrella) coverage that activates only when primary limits have been exhausted.