Rob, aren't umbrella policies (and I guess excess coverage, as well) just "lawyer bait" beckoning ambulance chasers with the lure of high payouts? In settlements, judges and juries tend to be cognizant of a defendant's ability to pay. Bankrupting defendant is counter productive, but lawyers love to get everything they can from an insurance company. Aren't we better off protecting our assets through other means? Umbrella policies just seem to be a very bad idea.
I guess you could say the same thing about insurance overall... But I would disagree that umbrella/excess is a bad idea because it's relatively inexpensive to buy per million $ of coverage. In the event of a lawsuit, hopefully the insured is covered, not exposed. The lawyer industrial complex is real though, especially in states like Florida.
Okay, riddle me this. On an umbrella, the insured is only required to pay their SIR in the event that the umbrella drops down and becomes primary coverage. If the umbrella limits provide coverage on an excess/secondary basis, the SIR does not apply. When would an insured be required to pay their SIR on an excess policy? An excess policy would never drop down and become primary. Excess coverage is written to either follow the underlying forms or in some cases, to be more restrictive than the underlying forms. Excess conditions state that the carrier has no obligation to pay or defend claims/suits until the SIR is paid. Is the insured subject to their SIR every time the excess policy coverage is triggered?
Hi Shantel, I don't believe there should be a situation where an SIR would be due on an excess policy in addition to any underlying SIR that's already been paid.
Yes, that's correct.... If the SIR was paid by the Insured from the primary policy then that's it... No more deductible/SIR again. But, there is also an exception to this rule which is called Corridor deductible which is very rare in P&C and commonly found in Health Insurances
