Opinion ID: 2308721
Heading Depth: 1
Heading Rank: 6

Heading: coverage under globe's umbrella policy

Text: Jordan and Keystone contend that Jordan is also covered under the $10 million Umbrella policy, pursuant to the provision in that policy providing coverage if the underlying insurance [Garage policy] applies, or would apply but for the exhaustion of its applicable limits of insurance. They argue that because Maine law mandates that Jordan be an insured under the Garage policy up to the statutory minimum, the Umbrella policy must also cover her in amounts in excess of that level because, by its terms, it covers anyone covered by the underlying Garage policy. We agree with the Superior Court, however, that the Umbrella policy applies to pay excess over the underlying insurance only if the insured qualifies for the underlying insurance by its own terms, and does not apply to Jordan solely by virtue of the statutory mandates. The purpose of an umbrella policy is to protect the insured in the event of catastrophic circumstances when the insurer's liability would exceed the limits of its underlying policy. It is designed to expand the amount, but not the scope of coverage. Statutes mandating minimum primary coverage are not intended to affect umbrella policies, and the statutes here do not operate to expand the contract language of Globe's Umbrella policy covering Lee Dodge. See 12A Couch, Cyclopedia of Insurance Law § 45.757 (1981) (financial responsibility acts do not apply to voluntary policies); see also Appleman, Insurance Law and Practice § 4300 (Buckley ed. 1979) (insurance policies in excess of compulsory coverage are voluntary policies to the extent of the excess). The Superior Court correctly concluded that there is no coverage for Jordan's accident under the Umbrella policy.