Umbrella Insurance Quiz – Multiple Choice Questions (MCQs) | Umbrella Insurance Policy

The reason to purchase an umbrella liability policy is:

 Options:

a) to avoid deductibles on liability claims b) to reduce insurance costs c) to provide higher liability limits and broader coverage d) to provide coverage to cover everything that the underlying coverage might exclude The Correct Answer Is:

 

Umbrella liability policies commonly exclude damages that are covered under:

 Options:

a) a contract where liability is assumed for use of aircraft b) a specified dollar value c) insured contracts d) workers compensation insurance The Correct Answer Is:

 

Which underlying policy is not required by a personal umbrella policy?

 Options:

A) Personal auto B) Watercraft C) Homeowners D) Personal Injury Coverage The Correct Answer Is:

 

Under a commercial umbrella policy, what is the retention limit?

 Options:

a) the underlying policy limits b) only pays for excess losses c) the deductible that applies when the underlying coverage does not apply, but the umbrella coverage does apply d) does not pay for losses self-insured by the insured The Correct Answer Is:

 

What costs are paid under an umbrella policy?

 Options:

a) only the required underlying limits and the defense costs b) the limit and any defense costs minus any applicable self-insured retention (deductible) c) the limit minus any self-insured retention d) the limit which includes the defense costs The Correct Answer Is:

 

The insured has a $1,000,000 personal umbrella policy with a $5,000 retention limit. For a $7,000 liability loss not covered under the insured’s personal auto policy, but covered under the Umbrella policy, the insurance company would pay:

 Options:

a) $3,000 b) $1,000 c) $5,000 d) $2,000 The Correct Answer Is:

 

All of the following are true of an Umbrella Liability Policy, except:

 Options:

A) After underlying coverage is exhausted, coverage is excess B) Property in the care and custody of the insured is covered C) Specific minimum limits for underlying coverage are required D) Certain losses excluded by the primary policy are covered The Correct Answer Is: