Umbrella and Excess Policies (UT-PC)

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Question 1 of 7

1. Question

Which insurance policy pays if the insured is negligent for an amount that exceeds the limit of the insured’s underlying coverage?

Umbrella liability

Specialty liability

Property

Time element

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Question 2 of 7

2. Question

Margarita has purchased homeowners, automobile, and umbrella insurance policies. Which of the following statements is NOT true?

An umbrella insurance policy is considered excess insurance.

Homeowners and automobile insurance policies are considered primary insurance.

Umbrella insurance will pay for damage to the insured's home if the amount of the property damage exceeds the Coverage A limit on the homeowners insurance policy.

An umbrella policy pays if the insured is negligent for an amount that exceeds the limit of the insured’s underlying coverage.

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Question 3 of 7

3. Question

A umbrella policy is

extra liability protection.

extra building coverage.

extra personal property coverage.

extra primary coverage.

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Question 4 of 7

4. Question

To purchase an umbrella policy, the insured must

be considered an incompetent party.

maintain a certain amount of underlying liability coverage.

be considered to be not at fault.

maintain a certain amount of property insurance coverage on their building.

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Question 5 of 7

5. Question

If the insured is negligent for a loss that is not covered by the underlying insurance–but is covered by the umbrella policy–the insurer will require the insured to pay an amount called

a self-insured retention (SIR) before the umbrella policy will pay.

a retained deductible (RD) before the umbrella policy will pay.

an excess insurance retainer (EIR) before the umbrella policy will pay.

a self-retained excess (SRE) before the umbrella policy will pay.

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Question 6 of 7

6. Question

Which of the following statements is NOT true?

An umbrella policy provides limits of insurance that are in-addition-to the limits provided by the underlying insurance.

An excess policy provides limits of insurance that are in-addition-to the limits provided by the underlying insurance.

An umbrella policy provides coverage for risks and perils not provided by the underlying insurance.

An excess policy provides coverage for risks and perils not provided by the underlying insurance.

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Question 7 of 7

7. Question

Why is an excess policy known as a follow form?

It provides the exact same coverage as the underlying policies; it just increases the limit of insurance.

It provides the exact same coverage as an umbrella policy.

It provides coverage for the insured regardless of where the insured goes. In other words, it follows the insured.

To purchase this policy, the insured is not required to have any underlying policy coverage.

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