Self insured retention is best described as the dollar amount listed on the declarations page that will be paid by the insured before this insurance becomes applicable.

• A. The deductible on the primary policy
• B. The dollar amount listed on the declarations page that will be paid by the insured before the umbrella becomes applicable
• C. The maximum per-claim amount the insurer pays
• D. The annual premium credit

Answer: (B)

Self-insured retention is the amount the insured must pay out of pocket before the umbrella or excess coverage kicks in. It appears on the declarations page as the dollar figure the insured bears before this layer becomes applicable. Once losses exceed that retained amount, the umbrella policy begins to respond up to its policy limits. This is not the maximum amount the insurer will pay per claim (that’s a limit), nor a premium credit, and it isn’t simply the deductible on a primary policy. The SIR specifically relates to the point at which umbrella/excess coverage attaches and begins to pay.