Don’t go into the rain without the right Umbrella (insurance)
There are, oddly enough, some real similarities between an actual umbrella and your umbrella insurance policy. Learn why Umbrella Brand, Type, Size and Maintenance ALL matter.
When it comes to your insurance, are you familiar with “Umbrella coverage” or “Excess liability?” If the answer is no, or you think the explanation will be boring, you’re in for a surprise. I’ve got nothing but mad love for insurance, especially when it comes to Umbrella insurance (also called Excess insurance). Regardless of the type you have, it’s safe to say that the insurance, finance, and legal communities can all agree: Umbrella and Excess insurance are one of the most important insurance policies you can purchase and carry. This blog will dive deep into Umbrella insurance. You’ll discover what it is, how to choose the right policy for you, and how it protects you from unexpected storms.
Today’s weather forecast: Enter real life
It’s raining outside, so grab your umbrella. Stop for a second and place yourself in this situation. Do you have one? Is it sturdy or is it flimsy? Did you find it at the lost-in-found, or was it left behind somewhere? Maybe you don’t care about getting wet because you are a risk taker. Go you.
But while you might be a risk taker that doesn’t care about getting wet, most of us want to stay dry.
Full Disclosure: Umbrella Brand, Type, Size and Maintenance ALL matter.
There are, oddly enough, some real similarities between an actual umbrella and your insurance. There are a range of options for both and considerations that must be made when purchasing each – detailed below.
Brand & Type: In the real umbrella world, there are many companies that sell lots of different types and styles of umbrellas. Some use superior materials and rely on sophisticated design and technology to separate themselves from others in the marketplace. As a consumer you expect your new umbrella to keep you dry, not malfunction, and be dependable when you need it the most.
You should have the same expectations when it comes to Umbrella insurance. An umbrella is key for your protection. However, this umbrella purchase is a bit more complicated. The insurance market is complex, with a lot of insurance carriers trying to claim your business and insure you. Dig into what they’re really offering you.
An umbrella insurance policy is extra liability insurance that protects you and your family’s finances and overall networth. It extends beyond the limits of your homeowner(s), auto(s), and watercraft liability insurance coverage in the event of a catastrophic loss. It provides an additional layer of security (and peace of mind) that is activated in the event of a loss where your primary coverage is exhausted, and damages exceed your coverage amount. The company you choose for your personal lines program will differ in what they cover, how they respond, the coverage and services they provide. Beware, there could be gaps. Heed the adage: You get what you pay for. When it comes to insurance, having an Umbrella of some kind is going to be a lot better than not having one. But, don’t buy an umbrella with holes in it. Weather or insurance, you need to be covered. Learn more about the two different types of markets when it comes to personal insurance, what they offer, and why it matters.
Size matters: Did I get your attention? Now that we know we need an insurance Umbrella or Excess policy to protect our assets, let’s talk size. How big should your umbrella be, and how much coverage do you need?
In my professional opinion, while the minimum $1M is a good starting point, it’s not enough. What’s your number? You will want to think about and quantify the amount of assets you have and your overall NetWorth. In this consideration, this number should include all liquid assets, property, and investments, as well as current and future income. Beyond the number, also think about the litigious society we live in, and why personal attorneys seem to own the daytime TV and billboard commercial ad spend.
Does this number seem too high? Let me ask you this: Do you own and drive a car? In thinking about this exposure alone (yes, your car) and all the loss scenarios that can happen, $1M falls short. If you’re found at fault for an auto accident that results in devastating, life-long consequences for the injured party or parties, their medical bills and pain and suffering can easily surpass $1M.
In finding your right Umbrella size, tap into the perspective and insight from your team of professionals that can help coach you. Work with a licensed insurance agent, someone you have a relationship with and trust. Include perspectives from your financial advisor, wealth manager or family office, personal or business attorney, or tax accountant.
Think through your current life circumstances:
What’s happening in your life?
Are you building wealth?
Who do you surround yourself with? Consider your assets (properties, vehicles), current and future income, family unit (current and future) and other things that involve any sort of fun.
Do you have pets? A pool? A boat? Anything on wheels?
Are kids living in the household? Are they driving or about to?
These critical conversations will help identify how much coverage and which type of policy is right for your situation, especially if you have a lot to protect.
Cost: Even though umbrellas and Umbrella insurance are both inexpensive, the tremendous benefits and service they provide are priceless.
This insurance typically starts at a couple of hundred dollars a year for a $1M Umbrella and goes from there. The cost depends on many variables that are carrier specific and are married to your overall exposure. This includes coverage amounts ($1-100M available); number and locations of properties; number and types of autos; any household drivers (and age); as well as watercraft. Other consideration factors include prior claim activity, and other exposures like having a pool or pets.
Price and coverage will vary from insurance carrier to insurance carrier. There are also minimum liability coverage requirements that must be met when it comes to your auto, watercraft, and homeowner insurance. If cost is a concern, there are techniques that can help defray the cost of your overall program to pay for one or increase your coverage.
The nitty gritty may seem technical, but the bigger picture is clear. Umbrellas (including in insurance) are critical shields for your security and protection.
Maintenance + Disclaimer
Regardless of its size, no umbrella will keep you dry from head to toe, especially if there’s a breeze. A good umbrella will withstand a stiff breeze, but it can also invert and flip inside out with a sudden gust. The same goes for your Umbrella and Excess insurance. Working with a licensed insurance professional is pivotal.
The marketplace is complex, and you deserve a professional to help you navigate the tricky landscape. Whether you have a lot to protect (or lose) depending on your risk management approach, take the time to choose your carrier and policies that best protects your life. As an immediate next step, talk to your financial planner and insurance agent to understand the type of Umbrella you have, ensure it’s enough, and review limits each year as part of your care and maintenance plan.
Rely on us for your Umbrella
NaVella was created out of equal parts love and frustration with the insurance industry, its complexities, and the ever-evolving market space.
With more than 16 years of experience in multiple facets of this industry, 1000+ insurance policies analyzed and reviewed, and hundreds of customized insurance portfolios crafted, we are dedicated to giving you control over what and how you protect what you care about most.
We are a woman-owned, progressive, independent insurance agency and consulting firm. We offer personal lines insurance solutions. Our product solutions include insurance for your: Home(s), auto(s), collection(s), Excess + Umbrella, boat, and term life. Our consulting and coaching services serve both personal and corporate clients. Headquartered in Massachusetts, and primarily focused on the Massachusetts and greater New England markets, we can write nationally.
If you’re ready to protect yourself now and in the years to come, please visit us at www.navellains.com, email us at hello@navellains.com, or call us at 617.399.3124.
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