We’ve compiled a list of frequently asked questions and answers about individual insurance for you.
Select questions below to reveal answers:
Do you have umbrella liability coverage, and have you chosen a coverage amount that matches your net worth and future employment income stream?
Many families assume that their liability coverage in their homeowners and auto policies will protect them if someone is injured on their property or in an auto accident. The liability limits in these policies will usually pay up to $300,000 and rarely more than $500,000. In today’s economic and political environment, families with substantial assets are more likely to be targets of multi-million-dollar lawsuits. Umbrella liability coverage protects your net worth and lifestyle in the case of a financially ruinous lawsuit. It steps in when the liability coverage in the homeowners and auto policy has been exhausted. It is important to have the right amount of coverage to protect your net worth. To be fully protected, consider your equity in real estate holdings, the value of your personal possessions, savings and investments, and your future income stream.
Will your homeowners policy pay to rebuild your home with similar quality materials and craftsmanship no matter how much it costs?
Standard industry tools that estimate the cost of rebuilding a home may not adequately value higher quality materials, superior craftsmanship, and unique architectural features in luxury, custom-built or historic homes. Most mass-market policies are insufficient, especially when losses are caused by a natural disaster affecting a large number of homes. The supply of building materials and labor can be outpaced by an increased demand.
If you recently expanded or upgraded your home, did you discuss it with your insurance agent?
Expanding your kitchen or bathroom, adding rooms, and finishing basements will materially affect the cost of rebuilding your home if it is damaged or destroyed. Additionally, you should speak with your agent before you start remodeling your home. Many homeowners don’t realize the potential risks and coverage gaps during the course of construction.
If you own a significant amount of jewelry, artwork, fine wine, or other precious items, have you insured them with a valuables policy and made sure to account for any change in value from year to year?
Most homeowners’ policies restrict the amount it will pay for jewelry, artwork, furs, stamps, and bottles of fine wine. Families who may have extensive collections should cover these items with a valuable articles policy. By doing so, you can be adequately reimbursed for high value items that are lost, stolen, damaged, or misplaced. The valuable article’s policy also covers some causes of loss typically excluded by a homeowners’ policy.
Do you have at least $1 million in uninsured/underinsured liability protection, and does it apply to more than vehicular accidents?
The majority of mass-market insurance companies do not educate the consumer on the potential risks of having inadequate limits of insurance; thus, a majority of policyholders maintain only minimal limits of coverage. If you were in an accident with someone who did not have sufficient limits to cover your injuries, your own policy could step in to fill those gaps. These types of risks extend beyond the road too. If you or a family member sustained a serious injury at a neighbor’s home, the neighbor may not have enough liability coverage to pay for treatment and potential lifelong care. To protect against these situations, you can purchase additional uninsured/underinsured liability coverage as part of an umbrella policy from carriers who specialize in servicing high net worth families.
If you employ household staff such as a nanny, caretaker, or chef, do you have employment practices liability insurance?
Lawsuits by domestic employees for wrongful employment practices are typically excluded in homeowners or umbrella policy. These claims could include discrimination, wrongful termination, sexual harassment, and other claims. While these claims are often baseless, adequate protection for legal fees and damage awards require employment practices liability coverage.
If you serve as an unpaid board member of a not-for-profit organization, do you realize the organization’s insurance program may not fully protect you from liability lawsuits brought against it?
Having the ability to give back to your community is enjoyable and fulfilling, but it can sometimes come with unexpected costs. Many families serve as volunteer board members or a trustee of a not-for-profit organization. These volunteers may not realize that their good deeds expose them to the threat of liability suits. Unfortunately, volunteer board members can be held liable for the actions or inactions of the non-for-profit. Often times, these organizations carry insurance to protect themselves, but coverage limits may be inadequate to cover some lawsuits.
Have you recently evaluated the potential for reducing the cost of your insurance program by raising your homeowners and auto policy deductibles?
You should consider how much you can pay out of pocket without significantly affecting your lifestyle. Many mass-market homeowners and auto policies offer deductibles of only $500 or $1,000. The savings are often substantial if you choose to self-insure with higher deductible options.
Have you consolidated your homeowners, valuables, auto, watercraft, and umbrella liability policies with a carrier that offers a package discount?
Many families often place their auto insurance with one company and their homeowner’s insurance with another. Spreading policies across different providers not only increases the potential for coverage gaps, it can diminish or negate the package discounts achieved when multiple policies are placed with one company.
Have you and your agent discussed all the safety and loss prevention devices in your homes and autos?
Policyholders frequently overlook potential policy credits for alarm systems and other risk prevention measures. These discounts could include: Fire alarms and sprinkler systems, burglar alarms, living in a gated community, water leak detection with automatic water shut-off, gas leak detection, electrical back-up, and lighting protection. Additional credits could be available on your auto insurance for ignition cut-off switches, location transponders, alarms, and transmission locks.