Do you have everything covered on your personal umbrella insurance?
Why does my personal umbrella insurance company need to know about everything I own?
We are asked this regularly. The purpose of personal umbrella insurance is to provide additional limits of liability above your other insurance policies.
The personal umbrella insurance can provide an extra layer of protection for the following insurance policies:
- Auto Insurance
- Home Insurance
- Renters Insurance
- Condo Insurance
- RV Insurance
- Motorcycle Insurance
- Boat Insurance
- ATV Insurance
- Many other personal insurance policies
The umbrella insurance rates are based on the number of vehicles, residences, rental properties, boats and motorcycles, etc. The carrier could deny the umbrella coverage if these risks are not listed on the personal umbrella insurance policy.
What if I have policies with other carriers. Does that affect my umbrella policy?
It depends. Some personal umbrella insurance carriers require that they write all of the underlying policies that are protected by the umbrella. This way they underwrite every risk that they are insuring on the umbrella insurance policy.
Other insurance carriers require that a minimum limit of liability coverage be maintained. They will ask for a copy of the underlying policy at each renewal.
It is extremely important that you let your insurance agent know if you have insurance policies with other companies. Not telling them can result in a big financial loss for you and your family in the form of an uncovered claim.
What if I forget to tell my umbrella policy agent about another insurance policy?
If you have an insurance policy with another agent or company and forget to inform your umbrella insurance company, it will create a major gap in your insurance plan.
Because the personal umbrella insurance company does not know about the other policy, they can, and most like will, deny a claim for that non disclosed policy.
If you have an insurance policy with another company, it is imperative that you tell your umbrella insurance agent or company.
What happens if I have something and I just don’t want to cover it under my umbrella insurance?
Let’s think about this. You have an umbrella because you agree that you have assets to protect. Would you want to lose everything you have worked for because of a claim on something you decided not to add to the umbrella?
If you believe in having a personal umbrella insurance policy, then you should understand, accidents do not call ahead for an appointment. And the claim that you need your umbrella protection could come from anywhere.
Why would you not want to pay another $10-20 a year per additional risk on your umbrella insurance and have it fully protect you?
What if I do not have the minimum coverage amounts required to have the personal umbrella insurance?
The reason that umbrella policies are so inexpensive compared to the limits of coverage that they provide is because they require that you have a certain amount of coverage on the underlying policies that is sufficient to cover the majority of the smaller claims. The umbrella is there for catastrophic claims.
If you have less than the required lmits on the underlying insurance policies, you will be creating an expensive gap for your insurance plan.
Claim example:
Your $1,000,000 personal umbrella insurance policy that requires a $250,000 underlying liability limit.
You decide to reduce your auto insurance limits from $250,000 to $100,000 to save some money.
There’s an auto accident and you are getting sued for $400,000.
You have a million dollar umbrella policy, so you are fully covered right? WRONG!
Here’s how the payments will be made in this scenario:
- Auto insurance will pay $100,000
- You will be responsible for $150,000. This gets you to the $250,000 underlying limits requirement of the personal umbrella insurance policy.
- Umbrella insurance will pay $150,00
The personal umbrella insurance in this case is designed to pay for claims that are over $250,000. In this case, by reducing your auto insurance limits, you created a $150,000 insurance gap that you are responsible for. So in order to save a few dollars up front, you exposed yourself to $150,000. So are you really saving money at this point? The total cost of insurance includes the premiums paid, deductibles assumed and the cost of uncovered losses.
How do you avoid issues with your umbrella policy?
The best way is to have all of your insurance policies with the same agency. This way, your agent can confirm that you carry the required minimum liability insurance coverage. They can also make sure that all of the exposures are listed on your personal umbrella insurance policy.
Having your insurance helter skelter all over the place can cause dangerous gaps in your personal insurance plan. And it makes it harder for you to keep track of.
Also, an annual review with your insurance broker will make sure that you have the best insurance plan for your family. As your lifestyle changes so do your insurance needs.
Contact Huff Insurance Today!
Huff Insurance is a Trusted Choice independent insurance agent. Our experienced team can make sure that you get the best insurance protection plan for your family. Fill out the form on this page or give us a call today at 410-647-1111!
