(November 2017)

Agents and brokers have to keep current with the underwriting requirements of companies with which they arrange personal umbrella protection. A key responsibility is to be vigilant regarding underlying insurance requirements.

The above precaution allows an insurance professional to handle renewals and new policies without unnecessary delays and problems. One practical, time-saving step is to make certain that underlying insurance is renewed at current required limits so that such policies need not be endorsed with higher limits at the time of renewal or when new umbrella insurance is ordered.

The minimum required limits may vary by insurance carrier and are established for all sources of primary coverage such as the following:

Depending upon the state or company preference, the limits may be expressed as split limits or as combined single limits. It is rare for required limits to be below $100,000 and much higher limits, such as $250,000/$500,000 split or $300,000 combined for auto liability, are likely.

It is a condition of coverage that underlying insurance for the limits specified in the declarations be maintained during the term of the umbrella insurance. Accounts need to be monitored carefully to avoid errors or miscommunication about intended protection.

Special problems may be avoided by monitoring an account. Maintaining contact with a client may prevent gaps or overlapped coverage. Inquiries made to a client could uncover the existence of previously unknown exposures such as newly acquired vehicles or craft, in-home business activity, or additional property or driver exposures.