If an insured fails to maintain the required underlying limits for a personal umbrella policy, what is the consequence?

When an insured fails to maintain the required underlying limits for a personal umbrella policy, they are responsible for ensuring that these limits are in place as a condition of coverage. If the required underlying limits are not met, the insured cannot utilize the umbrella policy benefits effectively. This means that in the event of a claim, any amount exceeding the actual limits of the underlying policy may not be covered by the umbrella policy. Thus, the insured will be liable for any amounts that fall below the required levels of the underlying coverage, which they should have maintained to ensure a seamless safety net provided by the umbrella policy.

Maintaining adequate underlying limits is crucial, as umbrella policies are designed to kick in when these limits are exhausted. Without the foundational coverage, the umbrella policy cannot function properly, leaving the insured exposed to financial risk beyond those limits.