What Does A Personal Umbrella Cover?

An umbrella is a great tool that can be used to provide you and your family additional liability protection on top of the liability that exists on your auto, home, and/or boat policies. Most people think an umbrella will cover gaps in coverage which is not true. An umbrella will only provide additional liability coverage for catastrophic events that are covered under your underlying policies.

Liability coverage covers bodily injury or property damage to others that you are responsible for. The average bodily injury liability limits carried by most people are $100,000 per person / $300,000 per accident. You can see with today’s rising healthcare costs – how quickly a bad accident could cause $100,000 in damages to others.

The first step in protecting your assets is raising your auto liability limits to the maximum allowed by your carrier which is usually $250,000 per person / $500,000 per accident. Once those limits are obtained you can purchase a $1mm+ umbrella for additional coverage. These usually cost $250-$500 per year depending on your risk profile (# of drivers in the home, age of the drivers, # of rental properties, presence of boats etc.)

We recommend an umbrella for three types of people:

1.       Someone who wants additional liability protection for peace of mind

2.       Individuals with significant assets they desire to protect

3.       Someone with young drivers and or recreational vehicles that could result in additional risk

Please feel free to reach out to me to learn more and discuss obtaining quotes for this important coverage.

Why Do My Insurance Rates Keep Going Up?

This is a difficult question to answer, however here are the 5 of the most common causes for your insurance rates to increase:

#1 Driving record and claims history. If you have been in an accident or received a ticket, in the last 3 years, you'll be surcharged for this on your insurance policy.

#2 Loss of discounts like multi-car or multi policy.

#3 Change of location. Where you reside plays a role in your insurance rates. Rural locations tend to be less expensive then metro areas.

#4 Adding/removing drivers or vehicles will impact your premium based on the exposure.

#5 Insurance company loss ratios. If an insurance company is experiencing heavy losses, it will increase their rates.

Working with an independent insurance agency is the best way to assure that your rates remain the most competitive for the right coverage needed.

3 Advantages to Working With An Independent Insurance Broker

I speak to people often who have not experienced working with an independent insurance agent. They are used to doing business with a “captive” carrier who can only sell their own products. Examples of “captive” carriers are State Farm, Allstate, and some Nationwide agents. Or perhaps they purchased their insurance direct from a carrier like Liberty Mutual or Geico.

There is another more efficient way to shop and purchase insurance - and that is to work with an independent insurance agent. Here are 3 good reasons to go that route:

1. Your agent works for YOU…and not an insurance carrier

While I have a great relationship with my carriers – at the end of the day my allegiance rests with my client. My job is always to work in my client’s best interest and find them the most aggressive rates for their policies. I don’t have a corporate sales manager dictating which products I need to sell this month. I am also going to be your advocate in the event you have to file a claim. I can leverage my relationships with our carriers to make the process go as smooth as possible.

2. Your Independent Agent Will Match Your Needs With The Appropriate Carrier

There is no “One Size Fits All” plan with insurance. Every client I work with is different – they have different needs, different driving records, different home sizes etc. Each carrier is also different – they have different “appetites” when it comes to certain zip codes, home styles, construction type etc. An independent agent is going to be able to “match” your particular situation with the carrier that best fits your situation. This is also the best way to get the most aggressive rates on your policies. For example – I have a carrier that is VERY aggressive with new construction homes. When I have a customer who needs insurance on their new construction purchase I am able to save them tremendous amounts of money on their homeowners insurance.

3.       It is Extremely Efficient 

Without an insurance broker you are left to call 10-15 different 1-800 numbers to shop the various carriers. We all know how annoying it can be to have to repeat all of your home and auto details over the phone several times in a row. An independent agent saves you the most valuable resource which is time.

What Homeowners Deductible Should I Choose?

There are many options when it comes to choosing a homeowners insurance deductible. The most common deductibles I see are $500, $1000, and $2500. Here are three strategies you can utilize when considering a deductible option:

1.       Raise your deductible to lower your annual premium

I personally use my homeowners insurance for catastrophic coverage. This means I am fine having a higher deductible (I personally have $2500) in an attempt to keep my annual premiums as low as possible. When I see customers who have a $500 deductible on their home, I often ask them if they would consider raising their deducible to save (sometimes hundreds of dollars) on their policy. Most times they are happy I pointed out they have such a low deductible because no agent has ever brought it to their attention.

2.       Look closely at your policy to determine if you have a separate              wind and hail deductible

Usually your policy will have a “wind/hail” deductible and a separate “all other perils” deductible. Depending on the carrier these two can be the same amount – or they could be different. Sometimes your “wind/Hail” deductible is a % of your coverage A amount. In other words you could have a $1000 deductible on your home with a 2% wind/hail deductible. On a $250,000 home this equates to a $5,000 wind/hail deductible. That could be quite the surprise when it comes time to report a claim!

3.        Flood Insurance deductibles can be much higher

If you are in a flood zone and are required to carry flood insurance you have several different deductible options. There are so many increments one can choose on a flood policy.  I had one customer who wanted a $10,000 deductible. I was afraid his lender would not allow that large of a deductible but they did. It lowered the premium quite low and he was willing to self-insure the first $10,000 in damage to his property due to flood.

Deductibles are truly driven by personal preference. There is no right or wrong answer – and knowing your deductibles can be helpful in the event you need to file a claim. If you have a higher homeowners insurance deductible you will be responsible for the majority of the smaller losses occurring at your home. Avoiding small claims on your home is another strategy to keep your annual premiums low.  

Looking for insurance or have a question? I will get this immediately and respond to you quickly!