DL 98 12–PERSONAL UMBRELLA LIABILITY POLICY AUTO LIABILITY FOLLOWING FORM ENDORSEMENT

(July 2019)

The form works by using its own definition of retained limit along with an additional exclusion to the DL 98 01–Personal Umbrella Liability Policy.

Example: Greg recently retired and decided to visit his insurance agent. “Barb? What can you do to save me some money? I moved to a house next to my favorite park. I walk everywhere I need to go and I sold my SUV.” Barb pulled out a copy of the DL 98 12 and said: “I know how we can save some money on your umbrella policy!”

The DL 98 12 works in two stages:

1. The first part acts as an exclusion that makes both the “bodily injury” and “property damage” liability coverage inapplicable to any loss created by the incidences of ownership, use, maintenance or entrustment of any recreational vehicle that appears on the exclusion’s schedule. The scope of the exclusion is broad, extending even to circumstances involving vicarious liability.

2. The second part then acts to make the DL 98 01 into a servant of the underlying coverage. Specifically, the DL 98 12's language obligates the modified Personal Umbrella to provide excess coverage for automobile liability on the same basis that exists in the underlying vehicle coverage. In other words, it follows the underlying coverage.

An item of interest may be the rationale for using this endorsement to convert the DL 98 01–Personal Umbrella Liability Policy into a following form. Depending upon the underlying coverage, the DL 98 01–Personal Umbrella policy could be modified to provide either narrower or broader coverage than the unendorsed umbrella.

It is important to be clear about any underwriting reasons for using the endorsement to change existing coverage. While it may make sense to use the DL 98 12 to exclude umbrella coverage for a type of vehicle that does not meet with the umbrella insurer's underwriting criteria, it doesn't make sense to use the form in an attempt to minimize harm from an unacceptable driver.