Umbrellas – They’re Not Just for Rain

By Guest Blogger Steve Viola, CPCU

Imagine watching your favorite TV show and not seeing an insurance ad. Impossible. There’s an insurance TV/radio advertising war going on in our living rooms (and cars) every day. The reoccurring theme is “save x% in y minutes.” Unfortunately, these ads have “cheapened” the value of insurance by their “save money quick” marketing campaigns.

I’ve been in the insurance industry for over 25 years. I’ve seen the incredible value of a well-designed insurance program. I’ve also seen the financial ruin resulting from the unexpected. Protecting your family’s assets from loss is just as important as fueling its growth.

Here’s an insurance ad I’d like to see air:

(1) Umbrella Insurance – what is it, what does it cover and how much does it cost?
A Personal Umbrella policy offers an unbeatable layer of liability protection – in $1 million increments – over the liability coverage limits you already have from your auto and homeowner’s policies. It’s not just for the wealthy. You don’t have to be a millionaire to be sued like one!

Here are a couple of nightmares:
• Your auto policy has liability limits of $300,000. Your car skids and hits a jogger who’s hurt so badly she’ll never work again. A jury awards her millions and your insurance policy pays the $300,000 policy limits leaving the rest for you to pay out of your own pocket.
• Your homeowner policy has liability limits of $300,000. Your child has a playdate who trips over a pair of shoes at the top of your steps and takes a terrible fall. The injury is severe and medical bills are high. A jury finds you negligent and awards the child millions. Your insurance policy pays the $300,000 limit leaving the rest for you to pay.

An umbrella policy is the absolute best buy in the insurance business yet only about 10 percent of homeowners have one, said a February 2013 Consumer Reports study. It costs only about $150 to $200 annually for the first $1 million of coverage, then about $100 for each additional $1 million.

(2) Be Sure Your Home Insurance Provides Adequate Coverage
A recent study shows that 69 percent of homeowners are under-insured. Unfortunately, many think they are fully protected and are stunned to find out at the time of loss their coverage is inadequate.

Here are a few questions to consider:
• Do you know your liability limits? Consider increasing this limit – you will be amazed at how inexpensive this is for the amount of additional protection provided.
• Imagine a catastrophic weather event that damages your home and many others in the area resulting in a dramatic rise in building costs. Would you want your policy to guarantee the full cost to rebuild your home no matter the cost?

(3) Life Insurance – if anyone will be financially devastated by your death, you need it
Most recognize the need to have life insurance on the primary wage earner. But what about the financial hardship created by the loss of a stay-at-home parent? Should something happen to the stay-at-home parent, the surviving spouse soon would find himself or herself as the primary income earner and the primary child care provider, while also coping with the loss. Life insurance is a crucial step in planning for you and your family’s future.

(4) Independent Agents vs. Captive Agents
Are you aware there are two very different types of insurance agents? The differences between the two are significant:
• Independent agents: (aka me) work for you, not for a specific insurance company. We have relationships with a variety of different insurance providers and can use these relationships to find you several suitable policies at competitive rates.

• Captive agents: (aka State Farm, Nationwide) work exclusively for one specific insurance company. If you work with this type of agent, you will need to comparison shop with other companies in order to be sure that you are getting a suitable policy at a reasonable rate.

The one big takeaway?
This stuff is important. Take some time to review your current policies and determine if they meet your needs. Or better yet…call me and we’ll review it together.

Steve Viola, CPCU
Viola Insurance Services, Inc.
336-829-0867
steve@violainsurance.com
www.violainsurance.com

Sponsored by Steve Viola, CPCU