PLNationalmedium
On a drop-down personal umbrella, when does the insured's Self-Insured Retention (SIR) — typically $250 to $1,000 — apply?
AOn every claim, regardless of whether the underlying PAP or HO policy already provides coverage for the same loss
BOnly on claims that ARE covered by the underlying policy, applied in place of the required underlying limit of liability the insured agreed to carry
Only on claims NOT covered by the underlying policy but covered by the umbrella, before the umbrella drops down to respond
DOnly on UM/UIM claims that exceed the underlying PAP uninsured-motorist limit shown on the auto declarations
Why this is the answer
On claims that are covered by the underlying PAP or HO, the personal umbrella pays excess of the underlying limit and the insured pays nothing additional out of pocket. On claims the underlying policy excludes but the umbrella covers (the drop-down scenario — typical examples include libel/slander, worldwide BI, or a personal-injury offense), the insured must first satisfy the SIR (typically $250-$1,000) before the umbrella's defense and indemnity obligations attach. In ISO DL 98 01 this retention is the deductible shown in the Declarations, part of the defined 'retained limit'.
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