Excess and Umbrella Policies: When Standard Coverage Runs Out After a Serious Crash

The at-fault driver’s insurance company offers you $25,000. That is their driver’s policy limit. Your medical bills already exceed $180,000 and you have not finished treatment. Your surgeon is recommending a second procedure. You have been out of work for four months. And the insurance adjuster says there is simply no more money available.

This is the moment where most people either accept a fraction of what their case is worth or give up entirely. But in many serious accident cases, the story does not end at the liability policy limit. There may be additional coverage sitting behind that primary policy that the insurance company has absolutely no obligation to tell you about.

The Coverage Most People Never Think About

Standard auto liability policies in Colorado carry limits. The state minimum is $25,000 per person and $50,000 per accident under CRS 10-4-619. Many drivers carry more. But even a $100,000 or $250,000 policy can be exhausted quickly when injuries are severe.

What many accident victims do not realize is that the at-fault driver may carry a personal umbrella policy or excess liability policy that provides an additional layer of coverage above their standard auto policy. These policies are more common than most people assume, particularly among homeowners, business owners, professionals, and anyone who has received competent financial planning advice.

A typical personal umbrella policy provides $1 million to $5 million in additional liability coverage. Some go higher. This coverage sits on top of the underlying auto policy and activates when the primary limits are exhausted. For the accident victim facing catastrophic medical bills and long-term disability, discovering that the at-fault driver carries an umbrella policy can transform a devastating situation into one where full compensation is actually possible.

Excess vs. Umbrella: The Distinction That Matters

The terms excess and umbrella are often used interchangeably, but they are technically different products with different implications for your claim.

An excess policy provides additional limits above a specific underlying policy. If the at-fault driver has a $250,000 auto liability policy and a $1 million excess policy, the total available coverage is $1,250,000. The excess policy follows the same terms and conditions as the underlying policy. It simply adds more money.

An umbrella policy also provides additional limits, but it may also broaden the scope of coverage beyond what the underlying policy covers. Umbrella policies sometimes fill gaps in underlying coverage and may respond to claims that the primary policy excludes. The broader coverage can create additional avenues for recovery that would not exist under the underlying auto policy alone.

For the injured person, the practical difference is this. An excess policy gives you more money under the same rules. An umbrella policy may give you more money and additional legal theories for recovery. Either one can make an enormous difference in a serious injury case.

How to Find Out If an Umbrella Policy Exists

This is where the process gets difficult, and where having an attorney becomes essential rather than optional.

Insurance companies are not required to voluntarily disclose the existence of umbrella or excess policies to a claimant. The adjuster handling your claim against the at-fault driver’s auto policy works for that specific insurer. The umbrella policy may be with the same company or a completely different one. Either way, the adjuster handling the primary claim has no incentive to tell you that additional coverage exists.

Discovery is the legal tool that changes this. Once a lawsuit is filed, your attorney can send interrogatories and requests for production that require the at-fault driver to disclose all insurance policies that may provide coverage for the accident. Colorado Rules of Civil Procedure require disclosure of insurance agreements that may satisfy part or all of a judgment.

Before litigation, your attorney can send a written demand to the at-fault driver requesting disclosure of all applicable coverage. While the driver is not legally compelled to respond before a lawsuit, many do, particularly when they understand that their personal assets may be at risk if they fail to cooperate and a judgment exceeds their coverage.

When the At-Fault Driver Is a Business Owner

Accidents involving business owners or employees driving company vehicles add another layer of potential coverage. A business owner who causes an accident may have personal auto liability coverage, a personal umbrella policy, a commercial auto policy on the business vehicle, and a commercial umbrella or excess policy through the business.

Each of these policies may provide separate and additional coverage for the same accident. The personal and commercial policies may stack depending on the circumstances of the crash. If the driver was conducting business at the time of the accident, commercial policies are almost certainly triggered regardless of which vehicle was being driven.

Colorado’s respondeat superior doctrine holds employers liable for employees’ negligent acts committed within the scope of employment. This means the employer’s commercial policies including any commercial umbrella coverage may be available to compensate you even if the employee was driving their personal vehicle on a work errand.

The Personal Asset Question

When insurance coverage is exhausted and the at-fault driver has significant personal assets, pursuing a judgment beyond policy limits becomes a consideration. This is relevant primarily in cases involving wealthy individuals, business owners, or professionals with substantial net worth.

Colorado allows judgment creditors to pursue personal assets including real property, investment accounts, and business interests. The practical reality is that most at-fault drivers do not have significant unprotected assets, and pursuing a judgment beyond insurance limits involves additional time, expense, and uncertainty.

However, for catastrophic injury cases where damages genuinely reach seven figures, the analysis must be done. An attorney experienced in serious injury cases will evaluate whether the at-fault driver’s financial profile justifies pursuing recovery beyond available insurance coverage.

What This Means for Your Own Protection

Everything in this article applies in reverse to you. If you cause a serious accident and your auto liability limits are exhausted, the injured party can pursue your personal assets unless you carry adequate umbrella coverage.

A personal umbrella policy providing $1 million in additional coverage typically costs between $200 and $400 per year. For $2 million, the annual premium might be $350 to $600. Relative to the protection it provides, this is among the most cost-effective insurance purchases available to any Colorado driver.

If you own a home, have retirement savings, operate a business, or have any accumulated wealth worth protecting, carrying an umbrella policy is not optional financial planning. It is essential. The cost of a policy is a rounding error compared to the cost of a judgment that exceeds your auto coverage and reaches into your personal finances.

Why This Matters For Your Injury Claim

If you have been seriously injured in a Colorado car accident and the at-fault driver’s primary policy limits are insufficient to cover your damages, do not accept a lowball settlement without first investigating whether additional coverage exists. Umbrella and excess policies are more common than most people realize, and identifying them can change the trajectory of your entire case.

The insurance company handling the primary claim will not do this work for you. They will offer the primary policy limit, present it as the maximum available, and hope you accept it. In many cases, that is a fraction of what is actually recoverable.

If you have been seriously injured in a Colorado car accident and the insurance company says there is no more money available, that may not be the full story. Call Flanagan Law at 720-928-9178 for a free consultation. We investigate every potential source of coverage so you receive the full compensation your injuries deserve.

Frequently Asked Questions

How common are personal umbrella policies?

More common than most people assume. Industry estimates suggest that roughly 15% to 20% of American households carry umbrella policies, with significantly higher rates among homeowners, high-income households, and anyone who has received professional financial planning advice. In serious accident cases, the probability that the at-fault driver carries umbrella coverage is worth investigating every time.

Can I find out about an umbrella policy without filing a lawsuit?

You can try. Your attorney can send a written request to the at-fault driver or their primary insurance carrier asking for disclosure of all applicable coverage. There is no legal obligation to respond before litigation, but many drivers and insurers do cooperate. If informal discovery fails, filing a lawsuit opens formal discovery tools that compel disclosure.

Does the umbrella policy have its own adjuster?

Often yes. If the umbrella policy is with the same company as the primary auto policy, the same claims department may handle both. If the umbrella is with a different insurer, a separate adjuster will be assigned. In either case, the umbrella carrier has its own interests and its own evaluation of your claim, which may differ from the primary carrier’s assessment.

What if the at-fault driver’s umbrella policy has exclusions that apply to my accident?

Umbrella and excess policies contain exclusions just like any other insurance product. Common exclusions include intentional acts, racing, and certain business activities. If an exclusion applies, that specific coverage may not be available. However, exclusions must be clearly stated in the policy language, and Colorado courts interpret ambiguous exclusions in favor of coverage. An experienced attorney can evaluate whether any claimed exclusion is actually enforceable.