Archive for category: Personal Insurance

Understanding How Umbrella Insurance Claims Work

Most people have standard liability coverage in their homeowners, auto, or renters insurance. However, standard plans don’t cover all types of claims or lawsuits, which is why it’s advantageous to have umbrella insurance to fill in coverage gaps.

Scope of Umbrella Insurance Coverage

Your homeowners policy or auto insurance offers only limited liability coverage if you damage someone’s property or cause injuries. With the right umbrella insurance plan, you can cover all types of unforeseen incidents that might trigger an umbrella insurance claim. An umbrella plan increases liability limits on your home and other valuable belongings. It also provides more comprehensive coverage.

 How Does Umbrella Insurance Work?

Suppose your car crashes into a tree or a tree on your premises falls on a neighbor’s roof. Your umbrella insurance kicks in after your underlying policy’s limits have been used up and pays for the remaining expenses. It’s handy to carry this insurance in case you cause a serious accident that causes more damage than your policy limits.

How Do Liability Limits Work?

Liability limits on your policy reflect the maximum amount the insurer will pay for damages. After that, you have to pay out of your own pocket unless you carry umbrella insurance. It’s important to consider umbrella coverage if you regularly throw house parties, which increases the odds of an injury on your property.

Review your policy coverage and deductibles to get an idea of how your liability plans work together. Suppose you have an auto insurance plan with a liability coverage limit of $400,000 and a deductible of $1,000. Meanwhile, your umbrella policy covers $1 million with a deductible of $400,000. If you cause an accident and face a $1 million lawsuit. What happens next?

First, you will have to pay the $1,000 deductible from your auto policy, and then the auto insurer will pay the rest of the $399,000 coverage limit. Once you have met the deductible for your umbrella policy, it will cover the rest of the settlement ($600,000).

 Umbrella Insurance Claim Scenarios

There are many different ways an umbrella insurance claim may arise. Here are a few of them:

  • Multiple crash injuries: You crash into a car full of people. Several passengers sustain serious injuries that exceed your standard coverage limits.
  • House party: A guest slips and falls at your house party and misses work for six months. The extended treatment and rehabilitation use up your standard coverage.
  • Cargo damage – You slam into a truck carrying very expensive goods that are destroyed by the collision. There is no way your standard policies will cover all of it, but an umbrella policy will.
  • Accident caused by a teen driver – Your teenage son borrows your car and goes on a joy ride with friends that ends in disaster, causing severe injuries to all involved.

Each of these events can be financially devastating for you without umbrella coverage. Ask yourself what are the chances of any of the above events happening to you. Accidents can occur anytime so you should consider having adequate umbrella insurance in place.

Contact us at Chambers & Company Insurance Brokers for more information on umbrella insurance and any questions you may have about your unique coverage needs.

How to Choose the Right Homeowners Insurance for Your Home

Choosing homeowners insurance that fits your personal and family needs will make things easier if you ever have to file a claim. Most homeowners understand that a standard homeowners insurance plan provides essential coverage for property damage, theft, vandalism, and financial protection against certain lawsuits. Here’s an in-depth look at customizing your home insurance options.

Learn About Coverage Options and Policy Types

Even though your standard plan covers various potential issues that affect the value of your home, you may need to add endorsements. An endorsement is a coverage addition that extends existing coverage or provides some type of specialty protection. You may need a special type of coverage for your specific location or the type of home you own.

Flooding is a gray area when it comes to home insurance. While your standard plan probably provides coverage for certain types of flooding, it might not cover floods due to old broken pipes. As a homeowner, you’re expected to maintain the property with regular maintenance and inspections. Any damage that could’ve been prevented with proper maintenance and care may not be covered by the plan.

Moving to a floodplain where flooding is a regularly expected disaster will likely accompany high insurance costs. You’ll probably need add-on coverage for full protection against floods. Be aware that climate change is impacting insurance policies in new ways. Flooding can now happen in many places where there’s been no consistent history of it.

As a homeowners insurance policyholder, you get a choice on the type of reimbursement plan that works best for you. Some policies pay for the depreciated value of damaged components of a home, while others pay for a full replacement. While a cash value policy covers the actual cash value of damaged or lost items, a replacement cost policy pays at the level it would cost to repair or replace the item. You may want to consider extended coverage if you live in a community with fast-rising home prices.

Add-on Coverage for Homeowners

  • Small Business Coverage protects the business-related equipment that you operate from your home business.
  • Dwelling Coverage pays for damage to your home and its structure.
  • Other Structure Coverage replaces fences, guest rooms, tool sheds, and other structures attached to the home.
  • Loss of Use Coverage pays for costs such as lodging and meals when damage forces you out of your home.
  • Liability Coverage reimburses a visitor injured on your property for doctor visits and medical treatment bills.
  • Pet Coverage pays for damage to other people’s property caused by your pet.
  • Building Code Coverage pays for the cost of bringing your home up to current building codes based on damage from a stated peril.
  • Identity Theft Restoration Coverage pays for legal fees, personal losses, and other bills resulting from identity theft.
  • Landscaping Coverage financially protects your landscape from disasters that aren’t covered in your standard plan.
  • Water Backup Coverage pays for fixing water backups and the damage it may cause that isn’t covered in your standard plan.

Nearly every disaster you can imagine is covered by some type of insurance. The more likely the catastrophic event, the more expensive the coverage is. Earthquake coverage is separate from a basic plan and definitely costs more in areas where earthquakes have a reoccurring history.

Compare Multiple Quotes

The best way to arrive at the most appropriate homeowners plan for your needs is to learn what your available options are and then decide. Make a list of your valuable possessions and share them with your insurer. From there, you can determine which items are covered by the standard plan and which items need endorsements. Jewelry typically falls into the category of unclear valuations that might require an appraisal.

Since each homeowner must customize their own plan, find an insurer who best understands your situation and offers the best deal for it. Do your own price comparison using a price comparison app or some other reliable method. It helps to use tools that allow you to adjust coverage limits and policy endorsements. Then ask each insurance provider if you can get a lower rate by bundling all your policies together.

Choose Your Deductible

The first step toward choosing the right homeowners plan is to figure out the costs of damage for various mishaps such as natural disasters, theft, and vandalism. Once you have ballpark ideas on what the costs would be without insurance, you can approach insurance deals with a clear vision of what’s fair and works for you.

Part of customizing a homeowners insurance policy is setting an appropriate deductible. That means establishing the price you’ll pay upfront for a disaster before your insurance coverage pays for the rest. You can lower your monthly premiums by raising your deductible.

Ultimately, you should only pay for the coverage you really need. In other words, you probably don’t need earthquake insurance in a region that never experiences seismic activity. On the other hand, if the region regularly has tremors that cause physical damage, you need earthquake coverage to protect your valuables. You may need to work with a professional appraiser to get accurate estimates on the value of each item.

Homeowners should be aware of what their standard insurance policies provide due to the complex details involved. Review your policy thoroughly with an insurance expert so that you don’t get hit with surprises when you file a claim. Contact us here at Chambers & Company Insurance Brokers for more information about choosing the right home insurance plan that brings you comfort and safety.