Florida Insurance Claims Adjuster License Practice Exam

If an Umbrella Policy serves as primary coverage, what part of the policy allows the insurer to apply a deductible?

1. The Stand Alone Form

2. The Follow Form

3. The Self-insured Retention

4. None of these answers are correct

The correct answer is: The Self-insured Retention

An Umbrella Policy serves as additional coverage for liability claims that exceed the coverage limits of an underlying policy. It does not replace or serve as primary coverage. The Follow Form refers to an Umbrella policy that closely follows the terms and conditions of the underlying policy. The Stand Alone Form refers to an Umbrella policy that provides its own coverage and is not tied to an underlying policy. Both of these options do not apply in this scenario. The correct answer is C The Self-insured Retention. This refers to the amount of risk that the insured will self-insure before the Umbrella policy coverage kicks in. This amount is usually expressed as a deductible. Therefore, the Self-insured Retention allows the insurer to apply a deductible when the Umbrella policy is serving as primary coverage.