An insurer will issue an umbrella policy only if a stipulated minimum amount of basic coverage on other insurance policies has been purchased by the insured.

Question

Quizplus · Accepted Answer

This is true. An umbrella policy requires the insured to have a certain amount of underlying basic coverage on their other insurance policies. This is because the purpose of an umbrella policy is to provide additional liability coverage beyond what is already provided by basic policies, rather than serving as a standalone policy.

An Insurer Will Issue an Umbrella Policy Only If a Stipulated