Umbrella vs. excess liability
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Excess = higher only; umbrella = higher and wider.
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Follow-form excess never pays what the underlying policy excludes.
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Layers pay bottom up, not in proportion.
Why people buy an umbrella
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Umbrella = big liability limits at modest cost.
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It supplements primary policies; it never replaces them.
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Liability only: no first-party property or own medical bills.
Uninsured and underinsured motorist under an umbrella
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§11580.2(a)(1): umbrella-only auto coverage is outside the UM requirement.
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UM/UIM in an umbrella exists only if the policy itself adds it.
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UIM maximum = UIM limit − amount paid by the at-fault side.
Underlying limits the umbrella insurer requires
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Common personal umbrella requirement: auto about $250,000/$500,000, homeowners about $300,000.
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Let an underlying limit drop and you pay the gap yourself.
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§676.6(c): losing the underlying policy is a ground to cancel a commercial umbrella.
Self-insured retention (SIR)
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SIR applies only when the umbrella covers a claim no underlying policy covers.
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Insured pays the SIR; umbrella pays the rest up to its limit.
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Underlying policy covers it → no SIR is taken.
Standardized umbrella forms
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ISO has a personal umbrella form, but its use is optional.
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Most insurers write their own umbrella forms.
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Same limit ≠ same coverage: compare the forms.