Auto-Owners is unique in being the only
A.M. Best-rated A++ insurance company offering its personal umbrella policy
without requiring any supporting underlying policy. Plus, as a stand-alone
policy, it compares very favorably to other stand-alone personal umbrellas
like those from RLI and United States Liability Insurance Group. [See
Comparing Stand-Alone Personal Umbrella Policies.]
Corporate 4 Insurance
As an Auto-Owners agent myself, I wanted to know how the unsupported
policy compared to the fully supported policy. So, I developed the attached
spreadsheet comparison, with editorial approval from Auto-Owners.
Auto-Owners Umbrella Policy Comparison.
I am writing this article
and sharing this comparison for the benefit of Auto-Owners agents
countrywide. However, there are two caveats. First, this is for illustrative
purposes only. What you see here applies to Minnesota as of September 2011.
If you are elsewhere, check for how your state differs by checking mandatory
state-specific endorsements. Second, although this is a black-and-white
comparison between a fully supported umbrella policy and a stand-alone
policy, umbrella coverage will improve if you add one or more underlying
policies with Auto-Owners. For example, if you place the underlying auto
policy with Auto-Owners, it is standard to remove the "following form" auto
coverage limitation. If you write the underlying homeowners policy with
Auto-Owners, likewise, the following form nonowned watercraft liability
endorsement is removed.
Auto-Owners' stand-alone policy is a true
umbrella—not just a straight excess policy. In fact, its scope of coverage
is often broader than that of some companies' fully supported umbrella
forms. As a result, I often write one or more of the underlying coverage
policies with one company for cost reasons and then write the umbrella with
Auto-Owners because the primary insurer's underlying policies plus their
fully supported umbrella don't cover one or more significant liability risks
facing my client.
An example would be a client with a personal auto policy
(PAP) covering two older vehicles for liability only who often rents cars on
vacation where full coverage is needed. Many companies' umbrella policies
won't cover the damage caused to the rental car or the damage you didn't
cause but for which you assumed responsibility when you signed the rental
contract. The reason is that the umbrella contains the same legal liability
exclusion for damage to property "in your care, custody, or control"
contained in the underlying auto policy. Auto-Owners' unsupported umbrella
covers that because it is not specifically excluded.
Another example is
where a client rents a facility for her daughter's wedding reception. In the
rental contract, she agrees to defend and pay any judgment against the
facility for injuries to guests at the reception no matter how caused. Most
underlying policies won't pick up this type of contractual obligation. Many
umbrellas won't either. Auto-Owners' stand-alone umbrella covers this
Here are examples of risks covered by the fully
supported umbrella that are sometimes covered by the stand-alone version,
with references to the item number on the comparison chart.
As you survey the kinds of risks facing your
client and identify those not covered by primary policies, here is a list of
those risks with broadest coverage by the Auto-Owners' umbrella only if
underlying policies are placed there as well.
The fact that the
above list is relatively short is a testimony to how strong the personal
umbrella stand-alone policy is with Auto-Owners. Since I don't always know
when some new adventurous risk might arise in my client's life, I try
whenever possible to write all underlying insurance with Auto-Owners, which
I believe is the stronger umbrella coverage for the client.
If you are an
Auto-Owners agent, my hope is that you will find this tool helpful to you,
particularly in discerning when it is necessary to place the underlying
insurance in part or entirely with Auto-Owners to broaden the umbrella
coverage for your client. There clearly will be times when it is to your
client's advantage to pay additional premiums for auto and homeowners
insurance with Auto-Owners compared to the competition in order to pick up
coverage for a serious uncovered liability exposure under its umbrella
Remember that, although the Auto-Owners basic umbrella form doesn't
vary from state to state, the state-specific endorsements do vary. So, if
you're operating in a state other than Minnesota, be sure to check with your
state underwriting department as to how this comparison may change as a
result of the different endorsements.
Jack Hungelmann's book, Insurance for Dummies,
contains much of this information and is available at your favorite
online. For more information on his risk management and insurance
business, go to
www.JackHungelmann.com, where you can check out sample newsletters,
brochures, and other articles written on various issues. For background
information, see Mr. Hungelmann's
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