If the underlying policy has an aggregate that applies to auto, what does the umbrella require under the 'Aggregates follow aggregates' rule?

• A. The umbrella must have a corresponding aggregate that follows the underlying aggregate
• B. The umbrella ignores the underlying aggregate
• C. The umbrella's aggregate should be larger than the underlying
• D. The umbrella cannot have any aggregate

Answer: (A)

Aggregates follow aggregates means umbrella liability is coordinated with the underlying policies, so the umbrella’s aggregate limits “follow” the limits of the underlying auto policy. When the underlying auto policy has an aggregate limit, the umbrella must provide a corresponding aggregate that tracks or follows that same limit. This ensures there’s no mismatched layering—claims reducing or exhausting the underlying aggregate also affect the umbrella’s exposure in a consistent way.

This alignment prevents gaps that could occur if the umbrella acted independently. The umbrella is not supposed to ignore the underlying aggregate, nor is it required to always be larger in size, and it certainly isn’t correct to have no aggregate at all.