An applicant for a Personal Umbrella Policy has $50,000/$100,000 auto bodily injury limits and a $100,000 HO Coverage E limit. The umbrella insurer requires $250,000/$500,000 auto and $300,000 HO E underlying. What is the MOST likely underwriting outcome?

Question

Accepted Answer

The applicant must either raise the underlying auto and HO liability limits to meet the umbrella's required underlying limits, or accept a self-insured retention equal to the gap, before the umbrella will be issued

Answer

The umbrella will be issued at the standard $1 million premium with no change to the schedule of underlying insurance, because a personal umbrella attaches over whatever primary limits happen to be in force on the date of loss

Answer

The umbrella will be issued and will drop down as primary coverage for the $200,000 auto shortfall and the $200,000 homeowners shortfall, with no self-insured retention and no change required to the underlying auto and homeowners policies

Answer

The umbrella will automatically reduce its own limit to $50,000/$100,000 to match the underlying auto limits, and the homeowners exposure will be endorsed off the policy entirely until the Coverage E limit is raised to $300,000

An applicant for a Personal Umbrella Policy has $50,000/$100,000 auto bodily injury limits and a $100,000 HO Coverage E limit. The umbrella insurer requires $250,000/$500,000 auto and $300,000 HO E underlying. What is the MOST likely underwriting outcome?

Explanation

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