Category: Personal

Save Your Life with a Carbon Monoxide Detector

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Carbon monoxide (CO) is a clear, odorless gas that is a by-product of combustion of fuels like natural gas, liquid propane (LP), coal, oil and wood.  It is poisonous to humans and pets.  Each year, more than 10,000 Americans are disabled by accidental exposure to carbon monoxide.  Between 1992 and 1996, the number of non-fire CO poisoning deaths (excluding death by motor vehicle exhaust) averaged about 544 per year.

The majority of CO poisoning deaths were connected with the use of household heating systems.1 Other consumer products that contribute to CO poisoning deaths include charcoal grills, gas water heaters, camping equipment, and gas ranges.   Between 1994 and 1998, approximately 10,600 people were treated in hospital for CO poisoning injuries associated only with consumer products.  Therefore, it is important to have heating systems and other gas appliances inspected annually not only for efficiency but more importantly for safety.

Installing Your CO Detector

Homes with gas heating systems should have CO detectors, clear and simple.  A detector should be placed on each level of your home and especially near bedrooms or sleeping areas.  CO detectors can be mounted at any height and should be placed at least 20 feet away from any fuel burning appliances, and at least 10 feet away from kitchens and bathrooms.  If your CO alarm is triggered exit the house immediately and call emergency services.  Do not re-enter the home until a professional has completed a thorough inspection for the source of the excess CO.

Testing Your Carbon Monoxide Detector

It is now possible to determine if your CO detector is working by using a special testing device found at local hardware stores.  These devices simulate carbon monoxide by using a small tablet that when moistened releases a non-toxic gas.   If the detector is working properly the alarm will should go off.

With regular inspections of your gas burning appliances and heating systems and the installation of a carbon monoxide detector, death and injury from CO poisoning can be prevented.

1 Estimates of Non-fire CO Poisoning Deaths and Injuries; Executive Summary; U.S. Consumer Product Safety Commission; June 1999

Don’t Let Water Damage Drain Your Wallet

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Water leakage is the most common form of damage to the home.  With an average cost around $5,000 for water damage repairs, it’s definitely a problem worth a watchful eye.  Most of these damage claims are a result of a broken washing machine or hot-water heater.   While these appliances were once tucked away primarily in the basement, now they are conveniently located on main or upper floors.  When they malfunction the water leakage damages walls and ceilings causing extensive, time-consuming and costly repairs.

There are preventative measures you can take to reduce the chance of water damage in your home from a faulty appliance.  They involve the following:

  • An average water heater lasts about 10 years.   If you notice wet spots on the floor or rust forming on the tank it is a good idea to think about replacing it.
  • A worn out rubber or plastic hose is an accident waiting to happen.  Examine the hoses on your appliances and under sinks for leaks from water lines or drain pipes. Consider replacing them with stainless steel hoses which have a much longer lifespan.
  • If your air conditioning unit is located in the attic check it periodically and have it maintained by a professional.   Make sure that your service agreement includes inspecting and cleaning the unit annually.  A leak starting in the attic will do considerable damage.
  • Only run dishwashers and washing machines while you are home.  If the appliance should malfunction you can turn the water off in order to avoid a huge flood.  It is, of course, vital that you know where the main water shut off valve is located in your home.
  • For less than the cost of dinner you can purchase a water alarm.  They work much the same way as smoke alarms do and are simple to install.  They can be placed on the floor or wall mounted.  The alarm’s sensor will trigger if exposed to any level of moisture.

Some water damage is covered by homeowner’s insurance and some is not.  In some instances a policy will only cover damage if regular maintenance has been performed.  It is therefore essential that these areas are checked before you suffer losses that you can’t afford to cover.

Coping with Dog Bite Liability

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You would have had to live underground with no radio, no TV, no phone, no Internet and no visitors for a couple of years not to know about the high-profile dog-bite trial in California.  A young woman was mauled and bitten to death by a dog bred for fighting.  That owner’s dogs had already exceeded the old every dog gets one bite standard.

In any case, even the one bite standard has disappeared along with the church social.  If your dog bites someone, even if you had no reason to expect it would, you can also expect to be sued.

Worse yet, it isn’t even all that unlikely your dog will bite someone.  According to the Centers for Disease Control, there are 4.7 million U.S. dog bites each year, resulting in costs equaling almost $1 billion.  The property/casualty industry paid out $310 million of that in 2001, up from $250 million five years earlier.

Insurance companies are not only wise to those figures; they are smarting from claims against homeowner’s and renter’s policies brought by the ranks of the dog-bitten.  As a result, some companies have eliminated coverage for dog bites; others demand proof that your dog is not a member of a particularly bite-prone breed.

Insurers sometimes institute these changes to a policy already in force, but they do communicate this to the policyholder.  Problem?  Most of us don’t bother to carefully read any communication after the initial policy, except bills.

So, if you own a dog, read your policy.  Even if it covers domestic pets and their damage, check with your agent to see if there have been changes since your policy went into effect.  And if so, make sure you’re still covered under that policy, or take additional action.

If your policy does cover actions by your dog, typically, it will provide between $100,000 and $300,000 in liability coverage.  If a claim exceeds your policy’s limits, you will be responsible for everything above that amount.

Once your dog has bitten someone, however, and a claim has been made, the dog poses an increased risk and your insurer may suggest finding the dog a new home.  Or, the insurer may charge a higher premium (which would be acceptable to most dog lovers, preferable, in fact, to losing the dog), or not renew the policy, or exclude the dog from coverage.  For the latter possibility, a dog owner may be able to add a separate policy specifically to cover the dog’s potential liability, although the cost, if you could find such a policy, might be prohibitive.  Many companies already ask policyholders to certify that they do not harbor a vicious animal.  Others won’t accept new business from any policyholder who has had a dog bite claim in the past three years, even if that pet is no longer in the home.

The twin issues of dog bites and liability/insurance have become so important there is a Web site devoted to helping consumers with their dog-bite issues; www.dogbitelaw.com.

Here, in brief, are some suggestions to be sure that your dog’s actions regarding humans are covered by insurance, and how to make the likelihood that your dog will bring liability problems upon you are minimized:

  • Have your dog spayed or neutered.  Studies show dogs are three times more likely to         bite if they are not neutered.
  • Socialize your dog to behave well around other people and animals.
  • Discourage children from bothering a dog that is eating or sleeping.
  • When you play with your dog, make it fun games such as fetch, not aggressive ones such as tug-of-war.
  • Avoid exposing your dog to situations that might cause it to be afraid or protective.
  • Have your dog obedience-not attack-trained.

If you don’t own a dog, you’ve probably stopped reading by now.  That would be a shame, because the statistics are on your side.

Beyond Excess Policies

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Most people have heard of an umbrella policy, or an excess policy as it is sometimes called. If you have high enough limits on your car and home insurance, it is likely that you can protect yourself from any extraordinary liability claims with such a policy for just a few dollars, relatively speaking.

But what if you own some really fine objects that would kill you, at least financially, to replace?  An umbrella policy probably won’t handle those, and they are usually not covered sufficiently under your homeowner’s or renter’s policy, either. You can schedule valuables on those policies that is, add them separately for a slightly higher premium.  But if the objects are really valuable and truly unique, even scheduling them won’t bring you solace or sufficient bucks to replace them or to go to France to grieve if they are stolen, lost in a fire, or carried off in a flood.  You need something more than schedules.  But what?

Consider Mysterious Disappearance Coverage, or other interesting variations, such as pair and set replacement and breakage insurance. Several companies offer these sorts of insurance.

Here are some specifics to look for if you are considering getting some special coverage for pairs, sets or even singles of valuable, portable jewelry, collectibles or unique items in your home:

  • Will the items be covered if you ship them to someone else–to a dealer for sale, or even a relative as a gift?  One insurer, for example, will cover such items among the wide range of categories they insure if the items are sent by secure mail or other secure shipping method.  Others will, too.
  • Will the insurance transfer if you give your mother’s ruby earrings to your daughter, now living in Dusseldorf?  Some companies let you list the recipient as the policyholder when you request the policy on those items.  You can also have the bill and policy sent to you, however, so the surprise isn’t ruined.
  • What about loose gemstones?  Some people like shopping for unset emeralds when they travel to Colombia, or they’ve got some nice stones someone removed from their settings and never got around to putting back.  Look for companies that will cover these.
  • What if one member of a set goes missing?  Return the remaining piece of the set to your insurer, and you can often receive the full replacement cost of the set.  Several companies provide this sort of insurance.
  • What if you are going to inherit a nice pile of valuables, but you can’t quite predict when?  You want them covered the minute they are legally yours, but how can you arrange it?  With some companies, you have a 90-day window of coverage jewelry, fine arts or collectibles you might inherit or decide to purchase as long as your other portable assets are insured with them.
  • Suppose you have some valuables that suddenly catch fire in the public imagination, and appreciate far beyond what they were worth when you insured them?  Look for a company that offers insurance that can also fluctuate. One company will pay for a loss of up to 150% of the itemized amount if the market value just before your loss occurs is greater than that amount.
  • What about breakage?  Your gemstones might disappear, but they won’t break.  Your ancient Etruscan wine flask probably won’t disappear, but it certainly could break.  Check into breakage coverage, too, while you’re going beyond the excess policy.

Sidebar:

Who knows what valuables you own?

Many people don’t really know what they own.  Here’s a checklist of things of value you might have forgotten about completely, but which you might want to insure:

Rings, watches, necklaces of gold, silver or platinum with or without gemstones; garments made of sable, mink or fox; paintings and other artworks; art glass, antique glass; rare books; porcelain figurines; antique furniture and lamps; collections of small objects from baseball cards to pens; silver utensils, gold-plated tableware, antique pewter; crystal; vintage wine collections; antique firearms and swords; currencies; maps; rare plants.

Accident Without Injuries Etiquette

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Your teenage daughter misjudges the space when she goes around a turning vehicle, and just taps the car’s right rear bumper.  The other driver, an older woman, appears unhurt. She says, It’s Easter time, and I’m fine.  Let’s just forget about it.

You were riding with your daughter and you think that’s a reasonable attitude, and agree.  So you all go home to the Peeps and the chocolate eggs and have a nice life.

A few weeks later, however, your insurance company informs you that the woman is suing them and you for lost wages (although she had already been on disability for paranoid schizophrenia) and neck injuries (you’ve seen her in the shop where you work without a cervical collar) and pain and suffering.

Where did you go wrong?  The so-called accident was only a tiny tap that barely scratched paint.  There couldn’t have been an injury, as your terrified daughter tells your insurance company’s attorney prior to trial.

Prior to trial!  Holy cow.

No one can guarantee what might happen when bumpers kiss.  But there are steps you can take to avoid fender-benders becoming the event of the decade.

Your first thought might be to call the police.  But in some jurisdictions, the police will not respond unless there are injuries. In many states, an accident without injuries and less than $500 damage means you don’t need to call the police to the scene; you can file a report later.  Know the laws in your state.  Then, by taking the steps below even without the police present you can protect yourself from false claims and help your insurance company reach the best decisions:

First, follow the law.  Virtually every jurisdiction requires drivers to carry their license, registration and insurance information.  Be sure it is with all family drivers at all times.

Second, take pictures.  Keep a disposable camera in the glove compartment and, in the event of a fender bender, use it.  Photos can later help show whether any repair estimates were inflated, or whether the force of contact was likely to cause injuries that might later be claimed by the other driver or passengers.

Also, take pictures of all the occupants of the other car, preferably while they are still in the car or at least while they are all still at the scene.  Why?  There’s a fraud scheme called jump ins. In an attempt to get a bigger settlement, people known to the claimant come forward and say they were also in the car and also suffered injuries.

Take pictures of the site of the accident.  Having photos of the cars on location can help you make your own case to the claims adjuster.  Write down the specifics of the location as well, for example:  The NW approach to the intersection of Locust Lane and Route 26, about 2 car-lengths before the speed limit sign.

Third, if there are witnesses, get their names and addresses. Some may be reluctant; be persistent within reason.

Fourth, exchange information with the other driver.  This information includes name, address, phone number, driver’s license number, name of the other driver’s insurance company, policy number, and license plate number.  If the driver is not the person named on the insurance card, find out and write down what the relationship is between the driver and that person; family, friend, employee.  Write down the policyholder’s name, address and phone information, as well.  Finally, write down a complete description of the other car, including year, make, model and color.

Fifth, keep your mouth shut. Under no circumstances tell the other driver, It was all my fault,even if you think it was.  Remember, there are people who stage accidents for the payoff, and you could have been positioned so that there was nothing else you could do.  Even if it was a bona fide accident, let the experts determine blame or no blame when they work out the insurance compensation.  Some of us feel so badly about any incident, especially if the other driver appears to have come unglued, that we are likely to accept blame when none is due.

  1. Now you can go home and have a nice life and drive even more carefully in the future to avoid the possibility of having to perform this tricky and sometimes frightening scene again.

Strangers on Your Property and Attractive Nuisances: What’s Your Liability Exposure?

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Strangers may come onto your property for all sorts of reasons:  a child chasing a ball that accidentally landed in your yard; a meter reader; customers for a yard sale, etc.  What’s your liability exposure, and does your homeowner’s insurance policy provide the coverage you need?

There is normally no particular care required of property owners to safeguard people who come onto their property whether the person has been invited or is a trespasser.  However, if there is a dangerous condition on the property that is not readily apparent and involves something man made, the owner or occupier of the property may have a duty to warn both strangers and guests of that danger.  If, for example, there is a hidden electrified fence, or a bridge that looks safe but is actually rotten and dangerous, you might have a duty to post a warning to protect anyone who might come onto the property.  If you fail to warn about a dangerous condition and a person becomes injured, you will likely be partially, and perhaps totally, liable for the injury.

Whether you have insurance coverage under the personal liability section of your homeowners’ policy would depend on the insurance company’s investigation of the event.  If investigation reveals that you were aware of the danger and didn’t take reasonable care to prevent people from being injured, the company would likely deny coverage.  It might even cancel your policy and you might have difficulty getting a new one.

The duty to warn of a dangerous condition is generally not applied if the hazard on the property was created by nature or the result of natural processes.

“Attractive Nuisance”

Insurers call an item that might attract children an “attractive nuisance.”  An attractive nuisance is any object that can be dangerous or deadly to a child, but the child is too young to realize the danger.  Swimming pools are the classic example of something that would attract a child and could also be very dangerous to a child.  If there is anything on your property that might attract children — such as pools, fountains, machinery, old appliances, or stacks of building materials — you have a special legal responsibility to try to prevent any child who might wander onto your property from being injured.  Property owners or occupiers can be liable for injuries a child may sustain when investigating an attractive nuisance — if they have failed to take reasonable precautions to prevent children from being hurt.  Most natural conditions, such as a lake or a naturally steep bank, are not considered attractive nuisances.  To be liable for injury, the owner or occupant of the object must create or maintain the harmful object.

Obviously, the attractive nuisance concept applies to anything that might attract small children, but it may apply to older children as well if the child was unlikely to understand the danger.  The owner is more likely to be found liable if children were known to play in the area and he failed to take reasonable precautions to prevent the injury.  Reasonable precaution will vary depending on the item.  Locked fences around swimming pools, trampolines, or old machinery; removing doors from old refrigerators; and storing construction materials safely are some reasonable precautions.  Often, such measures are required under local laws.  The law doesn’t require owners to childproof their properties but it does expect people to be alert to potential dangers to children and to take reasonable steps to prevent harm to those too young to understand the danger.

Ask your insurance agent what precautions you should take concerning dangerous but necessary objects — for instance, swimming pools, wells, or machinery. If the company requires a fence, install it, or you could lose your coverage. And, don’t be surprised if your premiums increase for the pleasure of having a pool, trampoline, or other attractive nuisance.

Why You Need an Umbrella Policy?

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Do you have enough liability insurance?  If there were a vehicle accident for which you were at fault, and a child were permanently disabled, would your auto liability policy offer enough coverage to pay for the skilled care the child would need for years to come?  If a young parent were killed in a freak fall on your property, would your insurance cover the support he would have provided his children as they grow up?  We’d all like to believe that such catastrophic losses would happen only to other people.  But there is nothing we can do to totally eliminate the risk of this type of event in our own lives.

Consider what would happen if there were a settlement (or judgment, if it goes to court) of $800,000 as a result of an auto accident for which you were liable.  Let’s say you have insurance with a limit of $300,000 per accident.  What would happen?  The auto insurer would pay its $300,000.  Then virtually everything you own would be fair game for seizure to pay off the additional $500,000, except for assets that may be protected in some states, such as your home.  Furthermore, your earnings could be garnished for years to come.   With stakes this high, and considering the relatively modest cost of additional liability coverage, it just makes sense for many people to purchase the added protection of an umbrella policy.

An umbrella policy is insurance that provides additional coverage once the liability limits on your homeowner’s or auto insurance policy are exhausted.  Umbrella policies are typically sold with limits of $1 million to $10 million.  In the example above, if you had a $1 million umbrella policy, once you satisfied the deductible, the auto insurer would pay the auto policy limit of $300,000, and your umbrella insurance would pay the other $500,000 of the $800,000 settlement or verdict.  Your assets would not be at risk.

One myth about an umbrella policy is that it’s only needed by the wealthy.  These days the cumulative value of homes, vacation homes, rental property, cars, boats, savings, investments, and so on, owned by many people, who don’t consider themselves wealthy, make them vulnerable to liability beyond their auto or homeowner’s insurance limits.  A good question to ask yourself is whether you have assets that you don’t want to put at risk in the event of a catastrophic liability.

Lifestyle also plays a role in determining liability risk.  Do you have a swimming pool, trampoline, swing set, or other recreational equipment that can lead to accidents?  Are there frequent guests on your property?  Do you engage in sports that could injure others?  Do you live in a wealthy town where you might be more of a target for a liability lawsuit?

How Much Do You Need?

People often reason that the amount of umbrella coverage they need should be the value of their assets, but this might not be adequate.  If, for example, you have assets of $1 million and buy $1 million of coverage, what happens if you’re found liable for a $2 million judgment?  Insurance would pay the first $1 million, plus the limit of the underlying homeowner’s or auto policy, but you could lose a significant amount of your assets for the second million.  If you were found liable for $3 million, you could lose not only a significant portion of your assets, but you’d still owe $1 million.  Both your future income and any inheritance you might receive would be jeopardized.   Just how much coverage you need depends on all your risk factors, your own financial planning, and your tolerance for risk.

There is usually a substantial premium discount if you buy your auto, homeowner’s, and umbrella policy all from the same company.  Additionally, if you have a claim, you eliminate the potential problems of dealing with different insurance companies where each might be trying to shift payment responsibility to the other, leaving you caught in the middle.

The cost of an umbrella policy depends on such criteria as the amount of coverage, the insurance company issuing the policy, and your own ‘personal risk factors’ (such as the number of traffic tickets you’ve gotten in the past few years, and possibly your credit report).  A million dollar policy often costs less than a dollar a day.

For some people another attractive feature of an umbrella policy is that it provides coverages not found in their homeowner’s or auto policies.   You are covered if you cause bodily injury, property damage, or personal injury.  Generally, the types of personal injury covered include false arrest, false imprisonment, malicious prosecution, defamation, invasion of privacy, wrongful entry, or eviction.  Some umbrella policies also provide coverage if you face liability arising from your service on the board of a civic, charitable, or religious organization.

Your insurance agent can help you decide whether an umbrella policy makes sense for your life style and financial needs.

Let an Umbrella Policy Be Your Safety Net

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There comes a certain point in your life when you can look back with a sense of pride at what you have been able to accomplish. Your hard work has paid off and you now are the proud owner of a nice house, a great vacation home, a luxury car and all the other amenities associated with the good life.

If you have reached this stage of your life, you are now wealthy enough to be vulnerable to lawsuits.  Incidents can occur in your day-to-day activities that could potentially cost you.  For example, the elm tree in front of your home could fall onto a neighbor’s house, and in the process, pull down electrical wires that start a fire, burning the neighbors house to the ground. Depending on the neighborhood, replacement costs for the house could be several million.

Or perhaps you have just been named to the board of your favorite non-profit. The organization is being sued for personal injuries that occurred during their annual bazaar. As a board member you are also liable and can be sued.

If you’re like most people, you feel confident that your homeowner’s and car insurance will protect you if you fall victim to a claim arising from normal activities. What you should be aware of is that while these policies do include liability coverage, the amount of coverage usually tops out at $300,000.

To protect assets, people need to increase their coverage with an umbrella policy. Umbrella policies take over after the liability insurance in your homeowner’s and auto policy stops. The umbrella policy will pay claims above the liability limits you currently have, up to the limit you have selected.

Since the major portion of the risk is assumed under the primary auto or homeowner’s policy, personal liability umbrella insurance is inexpensive. You can buy a $1 million or larger umbrella policy for about $200 a year.

Many carriers prefer to sell umbrella policies to clients who have both their auto and homeowner’s insurance coverage with them. Your insurance company may also require that your primary liability limits be a certain amount. Umbrella policies are generally sold with a deductible ranging from $250 to $1,000. Your carrier covers you if your actions cause bodily injury, property damage, or personal injury to someone else.

The broadest coverage under an umbrella policy is probably the personal injury coverage because it includes coverage against false arrest, false imprisonment, malicious prosecution, defamation, invasion of privacy, wrongful entry, or eviction. Your homeowner’s and car insurance policies cover bodily injury and property damage, but not personal injury. You can also buy umbrella policies that include coverage if you are held liable in the course of serving on the board of a nonprofit organization.

Another important aspect of this type of coverage is it not only pays damages, but also lawyer’s fees and defense costs should you be the defendant in a lawsuit. Even if a lawsuit is obviously a nuisance suit, you still have to pay the costs for mounting a defense. In this age of rising litigation expense, it is reassuring to know that you are well equipped to handle it before the need arises.

Umbrellas Are Not Just for Rainy Days Anymore

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One of the most important insurance policies you can buy is the personal umbrella policy, but many people are unaware they need one. Consider that lawsuits happen every day and if you were sued, would you have enough money to cover your attorney’s fees and possible judgments? Most homeowner’s and automobile policies offer certain protections to cover legal liability, but is it enough? If you are concerned about your ability to cover all the possible expenses of a lawsuit, you should consider purchasing an umbrella policy. This insurance policy will cover you if you cause bodily injury, property damage or personal injury to another party.

Umbrella policies also offer protections that traditional homeowner’s or auto policies do not cover, including false arrest; libel or slander; invasion of privacy; wrongful entry; eviction and more. While an umbrella policy offers additional protection, there are still claims that are not covered. For example, if you own a business, only a business insurance policy will cover general liability claims. Most umbrella policies do not cover punitive damages. Additionally, some umbrella policies are only available to policyholders who carry both their homeowner’s and auto insurance policies through the same insurance carrier.

Since umbrella policies are tapped only after the liability limits from your homeowner’s or automobile policies are exceeded; they are usually quite inexpensive. A policy with a million dollar limit can usually be obtained for $200-300 dollars per year.

Personal umbrella policies are growing in popularity. In the past, only wealthy individuals and families purchased this coverage. Today, middle-income families also may procure this policy for protection in our society’s increasingly litigious climate. As the tendency to sue for damages rises and awards granted by the courts grow, the personal umbrella policy is increasingly seen as an insurance necessity rather than a
luxury.

In particular, you should consider purchasing a personal umbrella policy if you have certain characteristics or engage in certain activities, including the following:

– Your total assets are greater than your underlying liability limits.
– You are financially responsible for the actions of a young,
inexperienced driver.
– You live in an exclusive and affluent neighborhood.
– You have a high profile career or high income.
– You frequently host guests on your property.
– Your residence includes a swimming pool.
– You own waterfront property, a farm, or a ranch.
– You own watercraft, aircraft, or off-road vehicles.
– You own numerous rental properties.
– You engage in extensive international travel for pleasure.

Umbrella Insurance Protects You from More than Just Weather

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Although you have probably heard of umbrella insurance, there’s a good chance you have no idea what it is. An umbrella policy is designed to protect you from almost everything that your homeowner’s and auto insurance policies do not, as well as fill in gaps in coverage when the limits of these policies are exhausted.

Lawsuits are filed daily against ordinary citizens, with reasons ranging from the frivolous to the justified. More often than not, people have no extra protection to block the plaintiff from going after their personal assets in the lawsuit. Umbrella insurance will protect you from this type of situation.

An umbrella is often referred to as excess liability. This excess liability coverage kicks in when the underlying limits on your homeowner’s or auto policy have been exhausted, or if you are sued personally for something that neither your homeowner’s nor your auto insurance covers. Depending on the insurance company, you can purchase anywhere from 1 to 5 million dollars worth of excess coverage, and sometimes as high as 10 million.

The amount of coverage you select depends on how much you are worth. If you have 5 million dollars worth of personal assets, you should get a 5 million dollar umbrella.  It is not uncommon for someone to buy a 5 or 10 million dollar umbrella policy even if that number far exceeds their net worth, because the coverage is so inexpensive to purchase.

Most insurance companies will not offer you umbrella coverage unless you already have both your homeowner’s and auto policies with them. Also, the insurer will require that you maintain a certain level of liability on the homeowner’s and auto policies in order to qualify for the excess policy. Usually, you must maintain at least $250,000 of bodily injury liability per person, $500,000 per accident, and $100,000 for property damage for your autos, and $500,000 of liability for your home.

The good news is that coverage is cheap. It is possible to obtain 1 million dollars worth of excess liability for just over $100 per year. The more cars and homes you have, the higher the premium, but the cost is still low. In addition to your home and cars, liability associated with any other conveyances you may have, such as boats, motorcycles, and other recreational vehicles, may also qualify for coverage under the umbrella, depending on the insurance company.

You are probably wondering when the umbrella coverage would ever be used. As an example, if you are involved in a car accident where you crashed into a pedestrian who was walking on the sidewalk, resulting in medical expenses that cost more than what your auto policy covered, the umbrella policy would kick in. Or, if the pedestrian decided to sue you for negligence and punitive damages, your umbrella can be utilized to cover your legal expenses and to pay any judgments levied against you.

You should also know that the excess liability covers you for all sorts of things that have nothing to do with your cars or homes.  For example, coverage includes personal injury protection, which includes false arrest and imprisonment, malicious prosecution, defamation, invasion of privacy, wrongful entry, or eviction.

Also, some umbrella policies provide coverage for you if you are sued in connection with any charitable boards or organizations of which you are a member. You may have to contact your insurance company and pay an extra premium for this type of coverage.

Hopefully this has helped illuminate the importance of having umbrella insurance. Without it, your personal assets are vulnerable in any lawsuit or legal action. The risk of a multi-million dollar lawsuit greatly outweighs the cost of protecting yourself with an umbrella policy. Give us a call to us about what type of policy might be right for you.