What is the term for the deductible an insured must pay to access funds from an umbrella policy?

The correct term for the deductible an insured must pay to access funds from an umbrella policy is the self-insured retention (SIR). This represents the amount that the policyholder agrees to cover out-of-pocket before the umbrella policy begins to provide coverage.

In the context of an umbrella policy, which is designed to provide additional liability coverage beyond the limits of primary insurance policies, the self-insured retention acts as a threshold. If a claim exceeds the primary liability coverage limits, the self-insured retention must be satisfied before the umbrella policy can be utilized.

Understanding the concept of self-insured retention is crucial for policyholders to know how much financial exposure they have before the umbrella coverage kicks in. Other terms, such as deductible limit or minimum deductible, may relate to standard insurance policies, but they do not specifically apply in the context of an umbrella policy's structure. Additionally, policy excess generally refers to the amount by which a covered loss exceeds the policy limit, not the amount paid before the umbrella coverage is activated.