DL 98 11–PERSONAL UMBRELLA LIABILITY POLICY AUTO LIABILITY EXCLUSION ENDORSEMENT

(July 2022)

The DL 98 11 specifically excludes coverage under the Personal Umbrella Liability Policy for any vehicle that is defined as an “auto.” This form’s use allows umbrella coverage to be written in instances where either the underlying auto exposure doesn’t exist or when an existing exposure is unacceptable to the insurer. There are various situations that may call for attachment of this endorsement.

Example: A senior-aged, male insured wants umbrella coverage for his property ownership and personal liability, but, living in the middle of a large city, he either walks or uses public transportation and has no vehicle-related liability exposure.

Example: A younger female insured has no vehicle liability because she never learned to drive.

Example: A middle-aged female executive operates a car that is provided by her employer. The employer owns and insures the car, so she does not own or use any other vehicle.

Example: A male insured owns a couple of vans for his personal use, but they’re in the name of his partnership. The partnership has a separate commercial policy for the vans.

Because of the resulting lack of response to any underlying auto liability, there should be a reduced premium for the excess coverage (though an insurer’s minimum premium rule may make any reduction moot).

Coverage Analysis

This endorsement gives both a potential umbrella customer and the insurer greater flexibility in providing umbrella coverage. The form works by adding an additional exclusion to the DL 98 01–Personal Umbrella Liability Policy. The exclusion 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 “auto.” The scope of the exclusion is broad, extending even to circumstances involving vicarious liability.

Exceptions

Since the endorsement uses the defined term “auto,” coverage would be excluded for the same types of vehicles that are typically covered by a Personal Auto Policy, such as a private passenger auto or pickup truck or van (with a gross vehicle weight rating of 10,000 pounds or less). However, there are some exceptions. The DL 98 11–Personal Umbrella Liability Policy Auto Liability Exclusion Endorsement is NOT applicable to losses involving trailers that are neither towed nor carried by an “auto,” or to any “auto” that does NOT have to be registered as a motor vehicle. However, vehicles that do not have to be registered must meet at least one of the following criteria in order to be exempt:

· Solely service a residence (02 15 change)

The prior edition exception required that the vehicle service only the insured’s residence. This slight change makes the exclusion less restrictive since exceptions would be made for a greater number of vehicles related to residential maintenance.

Example: Lana’s home was insured by a PUP. Her neighbors are elderly and she often helps by using her riding mower to take care of their lawn. Once, while mowing their grass, she got off the mower, leaving it to idle, as she ran to her house to get a drink. While she was inside, her neighbor’s visiting, toddler grandson is severely maimed when he tried to climb the running mower. Lana is sued, but coverage is denied.

Note: Previously, the endorsement’s language would have excluded the above situation since, at the time of the loss, the mower was not serving Lana’s residence.

· Be designed to assist a handicapped person and, at the time of loss, being used to assist a person or be parked at the residence premises or be in dead storage.

If none of these situations exist, even vehicles that do not require registration are subject to this exclusion.

Rating impact

Due to the fact that this endorsement, for all intent, eliminates coverage for auto-related liability, the reduced exposure should be reflected in the premium charged for the Personal Umbrella Liability Policy.