Is There a Hole in Your Umbrella?

Since opening our practice, we have urged our clients to purchase “umbrella” insurance coverage.  Historically, an umbrella policy increases the limits of underlying liability insurance coverages.

In New Hampshire, there is no compulsory insurance required to operate a motor vehicle.  Many drivers that elect to not purchase automobile insurance have limited assets and are often “judgment proof.”  A common way to protect motorists from an uninsured or underinsured operator is to purchase an umbrella policy.  For example, if you are involved in a motor vehicle collision with an uninsured driver, you may recover for injuries caused in the collision from your own insurance policy.

Recently, we have heard that certain insurers are excluding uninsured and underinsured claims from umbrella policies.  This new exclusion creates a hole in umbrella policies.  Currently, a bill is pending in the legislature that will close the hole and require that all umbrella policies include uninsured and underinsured motorist claims.

Until an appropriate bill is passed, we recommend that you write to your insurance carrier and agent to request written confirmation that your umbrella includes uninsured and underinsured motorist coverage.

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