Insurance can be an effective way to guard against disasters; however, over-insuring can leave you paying for coverage that’s unnecessary.
Overspending on insurance can seriously compromise savings for down payments, retirement accounts, college funds for your children and emergencies. Therefore, it’s crucial that you review and shop around for policies annually.
Policy Limits
Insurance policy limits dictate the maximum payout an insurer will offer for any one covered claim, and play an integral part in any policy’s premiums, risk exposure and protections provided. Being aware of how limit amounts are set helps you calibrate your coverage more accurately.
Liability policies offer two essential coverage limits: bodily injury and property damage limits. These amounts determine the maximum amount that insurers will cover in cases of injuries caused by negligent acts by insureds, with one combined limit often providing enough coverage but providing only partial protection in catastrophic events.
As an example, a typical auto policy offers two liability limits – $25,000 per person injured and $50,000 total for property damage – but in an incident of catastrophic proportions this sum may not cover medical bills and repair expenses of victims, and financial professionals usually recommend selecting higher limits.
Homeowners insurance provides limited liability protection. While many homeowners opt to stick with state minimum limits for liability protection, those with significant assets often seek additional protection through separate umbrella policies or “scheduling” items like jewelry and firearms to be insured as part of an umbrella plan.
An injured party may approach an insurance company with an offer that exceeds their policy limit and seek to settle. If they refuse or make an inadequate settlement offer, engaging in bad faith and potentially engaging in unlawful denial of benefits – they could face legal action for breach of insurance contract and may even be sued as engaging in bad faith conduct.
An experienced attorney can be invaluable when fighting back against insurance company bad faith conduct. Once evidence of bad faith conduct is provided, insurance companies are legally obliged to pay your judgment; this process involves conducting an in-depth investigation of losses as well as being proactive during negotiations.
Excess Liability
Your clients face risks every day when owning or driving a home, car or serving on boards – these risks often don’t go away, which means your clients should consider excess liability insurance as an added layer of protection to their existing homeowners, automobile and watercraft policies to cover damages beyond policy limits that exceed existing coverage. Sometimes this insurance is also known as supplemental liability coverage or additional insured or even occurrence-based coverage.
Excess liability coverage is an additional form of insurance policy designed to extend the per-claim or aggregate limit of primary policies like commercial auto, general liability and workers’ compensation policies. It can help safeguard against potentially large liability claims that might require using personal assets such as home equity lines and investment accounts as collateral for claims payments.
Even though most liability claims fall below their maximum limit, you never know when an unexpected major claim might surface and force you to use client resources – excess liability policies help your clients avoid having to liquidate retirement savings or investments just to cover a lawsuit that might otherwise go unpaid.
Your client’s business needs will determine which coverages you provide them with. For instance, technology firms with substantial e-commerce sales might need higher commercial auto and workers’ comp limits; businesses who regularly interact with consumers or use heavy machinery and equipment may want to increase their general liability limits as well.
Keep in mind that an excess liability policy should not be seen as a replacement for commercial umbrella policies, which typically provide additional coverage for property, automobile and watercraft. Such policies are available from licensed, regulated insurers who participate in state guaranty funds that provide compensation if the insured files for bankruptcy.
When purchasing excess liability insurance, it’s essential that your clients work with an experienced broker who can guide them through all their available options and choose a policy tailored specifically to their individual needs. Furthermore, unregulated insurers selling surplus lines policies could pose potential regulatory issues.
Uninsured Motorist Coverage
One in eight drivers don’t carry car insurance, according to the Insurance Research Council, meaning that should you get into an accident with one of these uninsured motorists and are injured, your medical bills and vehicle repairs could fall solely onto you without uninsured driver coverage in place.
If you are involved in an accident with an uninsured motorist or their policy limits aren’t sufficient to cover damage to your car, uninsured motorist coverage (UM coverage) allows you to file a claim with your own insurer through uninsured motorist property damage (UMPD) coverage. In general, medical expenses and pain and suffering costs will typically be covered under bodily injury coverage while uninsured motorist property damage (UMPD) covers costs to repair or replace it. You may even opt to combine both policies by paying an additional premium combining their limits into one higher limit policy limit coverage limit policy limit coverage limits than otherwise possible.
While uninsured and underinsured motorist protection (UM/UMPD) coverage isn’t required by law in every state, having it can help safeguard against uninsured or underinsured drivers. By having this insurance in place you can ensure you’re not left footing the bill following an accident, as well as protect assets against seizure by at-fault parties’ insurers.
While UM and UMPD premiums can add up quickly, to avoid over-under insuring it is recommended that you purchase similar limits for both policies as a matter of default. Our experienced insurance agents are here to assist in finding an optimal coverage solution tailored to meet both your needs and budget – contact us now and schedule a consultation session!
Underinsured Motorist Coverage
Uninsured motorist coverage covers your expenses if you get involved in an accident with a driver who lacks car insurance, an optional feature of your policy; in some states it is required. UIM includes two parts – bodily injury coverage for medical expenses and potentially lost wages and property damage coverage for vehicle repair costs beyond your liability limits of at-fault driver.
This coverage becomes crucial when the at-fault driver has insufficient liability limits to cover all damages caused in your crash. Alternatively, if the at-fault driver doesn’t possess assets that could cover any damages award that results from your lawsuit against them, or their insurer does not pay enough, filing suit could be your only recourse to claim for remaining property damages and injuries caused. Claim denial often results from having insufficient uninsured/underinsured motorist coverage – thus it’s advised that your coverage match or exceed that of the at-fault driver’s liability policy limits, with matching minimum limits for this type of insurance, or in some instances increasing them even more.
Some auto insurers may try to convince you of the need for additional UM/UIM coverage for things such as collision and roadside assistance. Though additional UM/UIM coverage can be useful, keep in mind that the minimum coverage required by law in New York only protects for $25,000 per person and $50,000 total in an accident – meaning only within its borders. In order to be fully protected in other states, it’s necessary to carry additional UM/UIM coverage in the form of SUM coverage (supplemental uninsured/underinsured motorist coverage), which combines extra uninsured motorist and voluntary underinsured motorist policies. Our law firm can assist in exploring all potential sources of compensation, including SUM coverage, to make sure you receive maximum payment after an accident. Contact us now for a complimentary consultation; we can meet you anywhere – at home or our offices – and work on a contingency fee basis so no fees are collected until we win your case.