Q: Is it best practice to ensure that the personal umbrella policy effective date aligns with the date on the homeowners policy, personal auto policy or any other underlying coverage?

Response 1: Historically, there hasn't been a coverage need for PUP concurrency, as the underlying personal liability coverage didn't have aggregates that could be exhausted. That may be changing as many insurers are using aggregates on underlying personal injury coverage. Having the policies renew at the same time can make it easier to review and make any changes needed.

Response 2: To encourage the insured to renew all policies with the same carrier—yes.

Response 3: In addition to facilitating better review of coverages and possible gaps on the administrative side of things, it is important that provisions relating to coordination among policies—such as what each policy requires of the other and how they interact—should be considered. If renewals occur at different times, these issues may be overlooked, especially if changes are made to one of the policies.

Response 4: To my knowledge, there is no reason to have concurrent dates on a PUP. That is only necessary for commercial lines, due to the general liability aggregate limit which applies per policy term. 

Response 5: Because the PUP or excess policy coordinates with underlying policies for both coverage and limits, which can change at the time of renewal, having the dates align makes claim settlement much easier. It also means that the coverages are less likely to be out of sync, which could be to the insured's detriment.

If the effective dates aren't the same, the coverage is still in place, but it puts a burden on the agency to be sure that any changes in underlying policies sync up safely with the umbrella or excess policy.

Response 6: Typically, the only reason would be to facilitate the ease of account handling. Typical PUPs do not have the same non-concurrency issues that occur with commercial umbrellas, where underlying policies could have aggregate annual limits that are out of sync with commercial umbrella requisites, potentially leaving a gap in coverage.

This question was originally submitted by an agent through the Big “I" Virtual University's (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

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