What is a Retained Limit in Personal Umbrella policies?

In the context of Personal Umbrella policies, a retained limit refers to the amount of loss that the policyholder must pay out of pocket before the umbrella coverage begins to apply. This is essentially a deductible that establishes a threshold for coverage. Under this scenario, once the policyholder has incurred losses that exceed this retained limit, the umbrella policy then provides additional liability coverage.

This feature is especially important, as it determines how much personal liability coverage the umbrella policy will cover beyond other underlying policies like home or auto insurance. It is critical for policyholders to understand their retained limit, as it directly impacts their financial responsibilities in the event of a claim. By knowing this amount, individuals can make informed decisions about their overall insurance coverage and potential risks.

Understanding the retained limit helps ensure that individuals have adequate protection for any liabilities that may arise, while also recognizing the extent of their financial exposure.