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I Have an “Umbrella” Insurance Policy. Do I Get Uninsured/Underinsured Motorist Coverage With The Umbrella?

Only if the Declarations to the policy specifically state that you get uninsured/underinsured coverage.

Most auto policies carry limits of $300,000 or under. Uninsured/underinsured coverage is optional.

So, if you tell your agent you want $500,000 in liability coverage or over (the number varies from company to company), he or she will typically sell you two policies.

The first will carry the “basic coverage” with liability limits of $12,500 per person or more; the second, which is the “umbrella”, will have supplemental limits – limits in addition to the basic coverage provided in the “basic” policy – of whatever you and the insurance company agree they should be.

The liability limits on the umbrella policy may be $500,000, or they may be $5,000,000, depending on how much in premiums you are willing to pay.

The umbrella policy can carry liability coverage only, but it can also carry uninsured/underinsured motorist coverage. You have to address this with your insurance agent.

Usually, umbrella policies are a relative bargain. You get a lot of extra coverage, and the premiums are not that much by comparison.

Here is where it gets tricky. Usually, most auto liability policies carry uninsured/underinsured coverage that is equal to the liability coverage. So if you have $300,000 in liability coverage, you probably also carry uninsured/underinsured coverage with limits of $300,000.

But the insurance company does not have to offer you an equal amount of uninsured/underinsured coverage with either the basic auto policy or with the umbrella policy.

A few years ago, another lawyer asked me to represent a couple. The wife had been in a terrible accident, and she had undergone very delicate neck surgery. She had medical bills of $170,000. Their basic auto policy carried $100,000 of liability limits, and $100,000 of uninsured/under insured limits.

They also had an umbrella policy – with the same company, and the same agent – with $2,000,000 limits of liability coverage – and NOTHING in uninsured/underinsured coverage.

So it looked like the wife was stuck with $100,000 in uninsured/underinsured coverage – period. That was all the company was willing to credit her with.

So we sued her insurance agent – and the company, because the agent worked only for that company, and the agent also took all her training through that company.

We contacted an insurance agent who was willing to testify as an expert that when a customer asks an agent for $2,000,000 in liability coverage, it is a mistake – or negligence – not to discuss the possibility of selling them an equal amount of uninsured/underinsured coverage.

It doesn’t cost that much, and the chances are that if you need one type of coverage, you need an equal amount of the other type.

The case settled the week before trial. I cannot tell you for how much – but my client was happy.

You cannot count on getting a result like this. The only way – for sure – to make sure that there is enough insurance is to specifically discuss it with your insurance agent.

I have been a lawyer over 30 years. Part of my job is knowing and understanding insurance. If you have an insurance question, speak with an experienced Lawyer – call me at 513-621-4775.

Because all situations are different, and because there may be other facts pertaining to your case that I don’t know about, you should not rely on this answer for legal advice. I am not your attorney, and no lawyer client relationship has been formed.

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