(July 2022)
Premium charges for an umbrella policy are based (by most
companies) upon their usual charges for underlying insurance. The basic limit
premiums for underlying Personal Liability and Automobile Liability insurance
are multiplied by factors depending on the limits of underlying insurance
carried. A charge is normally added for the comprehensive nature of the
umbrella coverage. Typically, the total premium that is developed is subject to
a minimum established by the company. The final premium may be reduced by a
dollar amount or percentage if the selected retention (underlying insurance
limit) is greater than the minimum retention assumed by a company’s rates.
Premiums for personal umbrella policies with limits of $1
million can be less than a few hundred dollars. Of course, premiums vary by
company and different factors such as:
·
Amount of underlying liability limits
·
Number of insured properties
·
Types of vehicles
·
Number of vehicles
·
Existence of RV and/or craft exposures
·
Ages and number of drivers (particularly
youthful and/or senior operators)
·
Territory
·
Optional endorsements
·
Whether all of the underlying coverage is
written by the same insurer
·
Existence of business exposures (either on- or
off-premises)
Note: In recent years, the
business exposure in both underlying auto and home situations are a larger
concern with so many households becoming gig-workers, becoming entrepreneurial
and/or renting out residential space.
·
Existence of attractive nuisances (pools,
trampolines, etc.)
·
Property rental exposure
Related Articles:
Personal Auto Program
Rating Considerations
Homeowner Program Rating
Considerations
Professional
Liability
The manner in which any business-related or professional
liability exposure is handled has a big impact upon the premium. While rare
(and becoming more so), some excess liability policies will respond to
situations involving professional services. Naturally, a higher premium is
associated with policies that do include such coverage. Any related premium
charges can be removed if any professional liability exposure is excluded by
endorsement.
Companies are typically cautious about offering excess
coverage over a primary professional liability exposure. Those companies that
do provide a market, typically only cover a narrow class of professional
categories. In those instances where coverage is written, the charge for the
professional exposure is computed separately from the personal exposure.
The total of the premiums determined for personal and
professional liability is the premium for the umbrella policy. This premium is
multiplied by an appropriate factor if a larger amount of insurance is
provided.