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Question about Umbrella Policy
Old 12-20-2015, 09:32 AM   #1
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Question about Umbrella Policy

I was doing some cleanup on my paper files. I started to wonder, are homeowners, auto, and umbrella policies sold on claims made basis? Alternatively, if a lawsuit is filed prior to the statute of limitations is up for something that allegedly happened during a previous year when these insurances were in force, is that claim covered by those previous years?

I guess if there is a tail, then I need to keep old policies, proof that I had these policies, etc, etc. OTOH, if these policies are "claims made". one had better think twice about canceling policies.

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Question about Umbrella Policy
Old 12-20-2015, 09:48 AM   #2
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Question about Umbrella Policy

We keep our liability coverages forever. In some cases there are "discovery" rules that can allow a plaintiff to reach back beyond the statutes of limitations. It's not a burden for us to keep them so we do.

We had one case where we were the target of an action at the end of the year, but were on a new policy by the time it was filed. In our case, the old policy applied.


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Old 12-20-2015, 11:54 AM   #3
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Keep old useless paperwork? Not me. Any insurance policy, old or new, is a contract. Regardless of when a legitimate, covered claim is made, any refusal to honor that legitimate, covered claim is a breach of contract. In litigation, all contracts with you by insurance company are discoverable. Insurance companies are also governed by your state Insurance Commissioner, or Dept. of Insurance.

In the digital age, I have almost no paper files any more.
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Old 12-20-2015, 04:29 PM   #4
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To answer your first question, Personal Policies are on an occurrence basis. So if you run someone over today, your current auto policy is responsible til the statute of limitations expires. You could cancel the policy tomorrow and they'd still be on the hook. I'd hand onto the dec pages on your policies for as long as the statute of limitations runs out. At least keep the company name and policy number.


Claims Made policies are different, you need to keep the policy in force for the claim to be covered (or purchase an extended reporting period "tail" coverage). These are usually used for some commercial policies, usually professional or malpractice coverages.
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Old 12-20-2015, 08:51 PM   #5
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I keep 10 years of paperwork and sometime longer, just in case.


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Old 12-21-2015, 10:02 PM   #6
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Thanks for the very helpful information. For me I think it will be best to keep this stuff, though I think going forward I can save pdf's rather than paper.

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