What is the deductible of a personal liability umbrella policy commonly referred to as?

In the context of a personal liability umbrella policy, the term commonly used for the deductible is known as the "Self-Insured Retention" or SIR. This refers to the amount that the policyholder must pay out of pocket before the umbrella policy begins to cover excess liability claims. The SIR acts as a threshold that must be reached in terms of losses before the additional coverage offered by the umbrella policy becomes effective.

Umbrella policies are designed to provide an extra layer of liability protection beyond the limits of the underlying policies, like homeowner's or auto insurance. Therefore, understanding the SIR is crucial for policyholders, as it impacts their financial responsibility in the event of a claim. The self-insured retention ensures that policyholders retain some level of responsibility for minor claims while providing substantial coverage for larger claims that exceed the limits of their primary policies.