Personal Umbrella: Much More Than Excess Coverage
Primary insurance policies have limits to the amount in claims they will pay. They exclude things they refuse to cover. Personal Umbrella Coverage is designed to supplement primary coverage. It can greatly increase the limits. It can also fill in gaps, covering things that the primary policies exclude. It can do these things for a relatively small additional premium. However, all Umbrella Policies are not alike.
Umbrella policies vary from each other concerning not only limits and premium amounts but also the gaps they do and don’t fill in. Also, all insurance buyers don’t have the same risks.
Therefore, it is important to match within reason and cost effectively the Umbrella Policy to your particular risks. If you won’t ever rent a boat, you don’t need an Umbrella Policy that emphasizes filling in the gaps for boat renters while neglecting a gap you actually have that can be plugged.
So, you need to compare your risks and primary insurance policies against the available Umbrella Policies in the market.
One way to approach this process is by listing all your risks and then finding the Umbrella Policy that covers those risks. From there, you can design your primary coverages to fit. This can be a beneficial method since Umbrellas don’t always require underlying coverage concerning specified risk categories.
Understand that typical Umbrellas are designed around the standard group of underlying policies. The method of evaluating gaps in coverage is designed to deal with your risks that are above and beyond the most commonplace risks covered by the standard battery of coverages and the most typical Umbrella Policy.
In addition to this process, you will want to examine the risks against endorsements that are available with the various Umbrellas. Endorsements can extend your Umbrella Coverage for a little additional premium. There are also mandatory endorsements required by the various states in the U.S.
So, what are your risks?
Well, a great place to start is with all your personal contracts and activities. Include in these all home use and personal-auto use for business purposes. Business, employment, and personal insurance overlap to some degree where insurance is concerned. There are endorsements available with some Personal Umbrellas that add coverage for home-based businesses and work-at-home employment and the like. An example is Work-Related Home Premises Liability that would cover any fellow employee on your premises for work-related reasons.
As for personal contracts, you need to consider your anticipated activities in addition to your routine contracts. Will you be hiring services? Will you be doing any remodeling, etc.? Are you going to be asked to sit on any charitable boards? Will you be traveling? Will it be foreign travel? Will you be renting? There are many things to consider. Not only must you consider your own contracts and activities, you must include those of your entire family (spouse, children, etc.).
Okay, you say, but as a personal insurance buyer, I don’t have the time or the knowledge necessary to evaluate all the different, underlying coverage types and all the insurance companies and to then figure out which Umbrella Policies fit best. Also, I don’t even know how to evaluate my own personal contracts in terms of my risk exposures and what coverages are available to handle those exposures. What am I to do?
You need an Independent Insurance Agency that has done the underlying work in order to help you wade through this process and your contracts to get value for your premium dollars and to manage and transfer your risks to insurance carriers.
Please understand that this is as much art as science. Experience dealing with insurance carriers and their claims managers must also be factored in. The financial and managerial strength of the carriers must not be overlooked.
Why use an Independent Insurance Agency?
Independent Insurance Agencies, when they have met the qualifications of many carriers, can help you place your coverage with a multitude of carriers at once that suit your risk profile and premium budget. Agents who represent just one carrier or just a few carriers can’t do that.
Now, we don’t advocate annually shopping around for your insurance. We advocate that insurance buyers find a solid agency and develop a long-term rapport.
Based upon all of the forgoing then, you’ll need to consider whether your agent or agency, if you have one, is properly prepared to help evaluate your insurance needs and to place your coverage with a good fit in the huge insurance marketplace.
Hill & Usher Insurance & Surety is prepared. We’ve done the groundwork. We have the databases. We know all of our carrier’s Umbrellas and other policies and their endorsements. We know how to read personal contracts to pinpoint gaps (risk exposures) that Umbrellas cover. We have the questionnaires and checklists concerning all these things, which we are constantly keeping up-to-date.
We’ll be more than happy to work with you to design and maintain a good personal insurance program.
Just how important is this?
If you are sued for something and you aren’t covered and don’t win the suit, you will suffer the loss. The claim could run into the tens of millions depending upon the accident/injury(s) involved. It’s very important.
Can we or anyone else guarantee a perfect fit?
No, if you end up with a seemingly perfect fit, it will not be because that’s the case available for everybody. There are just too many risks even though there are many underlying policies and Umbrella Policies available.
Can we or anyone else guarantee that other products won’t come on the market during the term of your policy(s) that might be a better fit?
No, policy forms are under constant revision and new ones are constantly being brought on the market. How do we know? We evaluate them constantly for the sakes of our thousands of clients. That’s what you need done for you too.
How can you evaluate my personal contracts?
You can send us photocopies or fax them to us or bring them in person. We also have agents who do house calls and will work in the evening around your own work-schedule if that’s what it takes.