Umbrella Coverage
Under an Umbrella policy, an insured has a retention limit which is a/an: -Deductible -Waiver -Exclusion -None of the above
A. The retention limit is a dedctible
A Personal Umbrella policy: -Extends the coverage on personal effects -Insures yachts for physical damage -Is a modified form of excess liability coverage -Is a basic liability policy
C. The Personal Umbrella policy provides excess coverage over underlying insurance. It also provides broader coverage than most underlying policies
The insured carries a Commercial Auto policy with the required underlying limit of $300K for bodily injury claims. The Commercial Umbrella policy is written with a "per occurrence limit" of $5 million and an "aggregate limit" of $25 million. He is involved in an accident causing a passenger train derailment and hundreds are injured. Several individuals make claims in excess of $1 million each. When will the aggregate limit under the Umbrella policy be a factor in this auto claim? -When claims exceed $5 million -Never -When the losses exceed $5 million -After the underlying insurer has paid its limit of $300K per claimant.
B. Auto claims are not a factor in the "aggregate limit" in a Commercial Umbrella policy. The insurer will be liable for those individual claims in excess of the $300 "per occurrence" limit up to $5 million each.
An insured carries a Commercial Auto Policy. He leases a vehicle in Germany and has an accident. Which policy might respond to provide coverage on a worldwide basis? -The Commercial Auto Policy -An excess policy -A Commercial Umbrella policy -None of the policies would respond to cover the accident
C. Depending on the insurer, the loss would normally be covered in a foreign country. In some cases it may be a reimbursement payment after the insured has settled the claim in a foreign legal system.
The insured carries a HOP with an underlying liability limit of $300K as required by the insurer providing the Personal Umbrella policy. The Umbrella policy limit is $1 million with an SIR of $10K. After the policy is issued the insured reduces the limit to $100K and does not notify the insurer. The insured's dog bites a child causing severe facial injuries. The insured is sued for $300K and the court awards this amount. What will the insured have to pay before the Personal Umbrella policy participates in the claim? -Nothing -$10K -$200K -$100K
C. The underlying carrier will pay the first $100K; the insured will pay the next $200K and the Umbrella policy will pay nothing because the insured reduced the underlying limit without notification to the insurer.
What is the term to describe the amount the insured must pay when the underlying coverage does not apply and the Umbrella policy does apply but the insured must participate in part of the claim? -A loss deductible -A participating amount -A self-insured retention -The share the loss provision
C. This is called the self-insured retention (SIR)
What are the three limits of liability coverage that are listed in the Commercial Umbrella policy? -The "per occurrence" limit -The "personal and advertising injury" limit -The "aggregate limit" -All of the responses are correct
D. All of the responses are correct
A Personal Umbrella policy provides additional limits of liability for which of the following types of policies: -Personal Auto -Personal Liability -Watercraft Liability -All of the responses are correct
D. The Personal Umbrella policy can provide excess and somewhat broader coverage with regard to all of the policies
