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Wednesday, November 28, 2012

Do I Need Excess Liability Coverage? Don't End Up Like Mary and John!

John and Mary live in a nice five bedroom home located in California. They've lived in their three thousand square foot home for twenty five years and are retired. Their home is paid for and worth about $900,000. They live off their retirement and have hardly no bills to pay. John and Mary have always had a homeowners policy to cover their home in case of fire, theft or other potential losses involving their home. Mary is age 75 and John is age 72. They hope to someday leave their home to their adult children.

On a nice spring day, Mary went to run some errands in her vehicle around her neighborhood. She pulled into the parking lot of her local grocery store. For some reason, after Mary parked her car , her foot slipped off the brake and hit the accelerator instead. Mary's car went through the wall of the grocery store. Her vehicle continued through the wall of the store and she collided into two pedestrians who were standing in line with their grocery carts.

Both of the pedestrians were rushed to the hospital due to the severity of the injuries they sustained from Mary's car striking them. Mary was upset about the accident and did not know what she should do. She called her insurance agent the same day of the accident and her agent took her information to start processing her claim.

Months later after the accident, Mary and John found out that the damages filed by the two pedestrians injured from the accident, exceeded the auto insurance liability limits that they carried with their insurance company. John and Mary found out from their adjuster that they would be personally liable for any money damages which exceeded the liability limits that they carried.

The adjuster also told them that the pedestrians attorney did an asset check to see if Mary and John owned property. The attorney found out that they owned a home and would be expecting them to contribute additional monies towards the settlement of the pedestrians claims in addition to the auto insurance liability limits that they carried.

Mary and John were devastated and did not realize that their home the most valuable asset they owned was at stake! They worked all their lives for their home and could not believe that it may be at risk due to the accident. John and Mary did not know they may have avoided contributing monies towards the pedestrians injury claims if they had excess liability coverage or an umbrella policy!

What is excess liability coverage or an umbrella policy? This policy would be liability coverage which would exceed your homeowners or vehicle policy for damages you may be liable for.

The cost of excess liability coverage or an umbrella policy is very minimal for the amount of additional coverage you would receive. You can expect to pay somewhere between $150-$400 annually for this coverage. Consult your insurance company for details. Remember, excess coverage is important for you to consider if your assets are substantial, especially being a homeowner. This extra protection may give you better peace of mind in the long run and will be well worth it!

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5 Fundamental Principles of Insurance

Insurance is a contract, a risk transfer mechanism whereby a company (Underwriter) promised to compensate or indemnify another party (Policyholder) upon the payment of reasonable premium to the insurance company to cover the subject-matter of insurance. If you are well conversant with these principles, you will be in a better position in negotiating you insurance needs.

1. Insurable interest. This is the financial or monetary interest that the owner or possessor of property has in the subject-matter of insurance. The mere fact that it might be detrimental to him should a loss occurred because of his financial stake in that assets gives him the ability to insure the property. Castellin Vs Preston 1886.

2. Umberima fadei. It means utmost good faith, this principle stated that the parties to insurance contract must disclose accurately and fully all the facts material to the risk being proposed. That is to say that the insured must make known to the insurer all facts regarding the risk to be insured (Looker Vs Law Union and Rock 1928). Likewise, the underwriter must highlight and explain the terms, conditions and exceptions of the insurance policy. And the policy must be void of 'small prints'.

3. Indemnity. It stated that following a loss, the insurer should ensure that they placed the insured in the exact financial position he enjoyed prior to the loss (Leppard Vs Excess 1930).

4. Contribution. In a situation where two or more insurers is covering a particular risk, if a loss occurred, the insurers must contribute towards the settlement of the claim in accordance with their rateable proportion.

5. Subrogation. It has often been said that contribution and subrogation are corollary of indemnity, which means that these two principles operates so that indemnity does not fail. Subrogation operates mainly on motor insurance. When an accident occurred involving two or more vehicles, there must be tortfeasor(s) who is responsible for accident. On this basis, the insurer covering the policyholder who was not at fault can recover their outlay from the underwriter of the policyholder who is responsible for the incidence.

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Insurance Umbrella Policy - A Complete Buyer's Guide

Insurance umbrella is the best policy when it comes to providing additional liability coverage for legal claims and other out-sized grievances against the property owners and vehicle insurance policies. When the other liability insurance policies lapse it is time for the insurance umbrella policy to kick in and adjust the difference by making up for it. The claims which are not covered by the property or vehicle insurance are also covered by this policy.

There are different values of an insurance umbrella policy which ranges anywhere between proximately one million dollars to ten million dollars. The coverage amount on these policies is high but so is the amount deducted this in turn makes the premium of this policy highly affordable.

Important Points From The Buyers Guide:

1.The most important thing that you are required to do is gather all the important pieces of information on your home or vehicle insurance policies. This includes the contact numbers and the liability coverage provided by the insurance this will help in the easy verification of facts.

2.You are required to synchronize your existing home or vehicle insurance policy with the insurance umbrella policy. This is important because an umbrella policy comes in use after your previous policies gets exhausted.

3.Dealing with a single company is an advisable thing to do because it reduces the bother of having to deal with numerous companies who will argue over the issues of liability responsibility. Thus choose the company which serves you first.

4.It best to do some research before buying this policy. Contact various different companies and take an estimate from them on the umbrella policies they provide this will give you the benefit to compare and contrast the estimated amounts and then choose the one which suits you the best.

The people who reside in expensive places and those who lead a lavish lifestyle require this type of policy because general insurance resources will fail to cover the risks of a high lawsuit.

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Excess Liability Insurance - Synonymous With Savings and Peace

Individuals and professionals often go long ways in protecting and fortifying their assets but often miss out on backing themselves with comprehensive insurance coverage in the event of a disaster. Often times, insurance for different components are opted for which is the right option at the epidermal layer. But these insurance policies cover a certain amount with respect to the various components of your assets and you might have to pay a considerable amount of money from your pocket in case of a lawsuit. This is where excess liability insurance comes into play and contributes that extra amount of coverage so you don't have to bear all the extra expenses all by yourselves.

The excess liability insurance is a must have in an individual's arsenal of insurance policies to make sure heavy damage is prevented during unprecedented events. To policy holders, excess liability policies provide an extra layer of peace and protection during possible financial losses incurred due to the claims imposed by others injured because of the policy holder. If the policy holder has a liability insurance coverage, the basic liability coverage increases by excess liability insurance.

There are different types of excess liability insurance schemes provided by insurance firms and these policies are custom built to suit individuals and professionals alike. They are also available for large corporations. Customized excess liability insurance policies are available, meeting the requirements of individuals and corporations so it helps curb the risk and loss factors in the event of an unforeseen situation.

Policy holders benefit from the coverage offered by their policies from property damage as well as injuries. Additional protection can be opted for, from this policy against claims which are caused by false eviction, false arrest and slander. Excess liability insurance always depends on the policy holder's basic policy, which means it provides coverage beyond an already existing underlying policy such as a home- owner's policy or an automobile policy. The excess liability policy can include medical costs and other claim payments that may exceed the underlying policy's amount. The coverage is normally provided by an umbrella liability policy and these personal liability policies are provided by most casualty and property insurance firms.

No matter you are rich or poor, big or small; you should evaluate your possessed insurance policy covers against the potential liabilities. if you found that you may face a situation, when you run out of covers then you should go for umbrella insurance.

Why You Need An Umbrella Insurance Policy?

You might have heard about Umbrella Insurance, but may be you do not exactly know what it means. It does not guarantee you to stay dry, while walking in the rain, but it provides an umbrella of almost everything that other traditional insurance policies do not. As well as this, fills in gaps in coverage after your limits of standard policy are exhausted.

After realizing the meaning of this insurance policy, you will probably have one question - Why I need an umbrella insurance policy? This article will basically respond to your question.

On a daily basis, there are personal complaints filed opposed to ordinary people, with various reasons. Once or if it happens to you, you might be prepared for it. Frequently, individuals are charged and have no further protection to protect the claimant from going in the lawsuit after this. In this case you need to have an umbrella insurance coverage and you will avoid such sticky situations.

Umbrella insurance is often stated as excess liability. It gets going when the basic limits on your car or home insurance are exhausted, or if you are generally charged for something that is not included in your traditional insurance policies.

The majority of insurance companies won't give you coverage except you have both home and car insurance agreement with them.

It is essential to understand that the excess liability defends you for all kinds of items that have nothing to share with your auto or home. Things like mistaken arrest, false custody, slander, unlawful access or deportation are included in your umbrella.

In addition, some umbrella insurance policies offer coverage for those, who have connection to any charitable organization where they associate.

It is not a requirement that everyone should have an umbrella insurance policy, but you may be amazed at how many citizens necessitate it. You are recommended to obtain this policy if:

1. You hire out your house or join in a holiday exchange program with other holidaymakers.

2. You are a business proprietor and if you possess a multimillion dollar company, in that case make sure you have this policy.

3. You allow people to look after your house while you are away.

4. You have a housekeeper, gardener or other person who works at your house and who are not qualified or joined.

These are the main points that will help you recognize why you need umbrella insurance policy. If you find yourself in one of these categories, you are advised to call insurance companies and get an estimate of an umbrella insurance policy. Prices are low and so it is well worth your money. It does not even make awareness to take additional risks when safety can be acquired at such a low price. Remember that your safety is the foremost.

Enjoy yourself with an umbrella insurance policy. This kind of insurance provides an extra peace of mind by defending your possessions and your well-deserved money.

Five Things You Should Know About Liability Insurance

1. In today's litigious society, 1 in every 12 Americans is sued each year, rendering liability insurance crucial in protecting yourself and your loved ones. Although many people believe that it won't happen to them, the frightening reality is that anyone can be sued. Could your otherwise friendly dog sense fear and harm someone? Could you be deemed at fault for a car accident? Could someone sustain an injury on your property? These are just a few of the common ways you can be confronted with a lawsuit, jeopardizing your family's finances.

2. Whether you are a home or business owner, one important type of liability insurance is an umbrella insurance policy. Providing an additional layer of liability coverage on top of your existing policy's liability limits, this type of coverage proves invaluable in the event of an accident or other situation that evolves into a lawsuit. For instance, if your auto insurance policy has a liability limit of $250,000 and you lose a $500,000 lawsuit resulting from an accident, you will be left to finance the remaining $250,000 alone. An umbrella policy can prevent this, providing you with additional liability coverage in million dollar increments to help you finance the costs of lawsuits, settlements and jury awards. Without this additional coverage, a serious accident can leave you confronted with a financial disaster. A commercial umbrella policy functions in the same way, providing you with additional liability coverage for your business, on top of your commercial general liability policy's existing liability limits.

3. As a business owner, there is a specific type of liability insurance that concerns you - commercial general liability coverage. In addition to your worker's compensation coverage and insurance for your commercial property, this type of liability coverage will also prove invaluable in protecting your business from financial disaster. In the event that your company is confronted with one of the most common types of lawsuits filed against businesses, which include discrimination, harassment and wrongful termination according to Chron.com, your insurance will provide coverage. Since losing a lawsuit could force some small companies out of business, this type of coverage plays a significant role in protecting the company you've worked hard to build.

4. Liability insurance is not only important for home and business owners, but also it proves crucial in protecting people considered to provide professional services, like medical professionals. While all providers of professional services should protect themselves with professional liability insurance, physicians tend to face especially high risks. In fact, according to the American Medical Association, six out of every 10 physicians ages 55 and older have been sued, illustrating the importance of professional liability coverage, which protects companies and individuals against loss resulting from acts, errors or omissions in the performance of their professional duties. Professional liability insurance can help protect all medical professionals, from nurse practitioners to pediatricians, from the increased exposures they face.

5. Considering that liability coverage plays a pivotal role in protecting what matters most to you, from your home and family to your business, it's important to rely on someone you can trust to help guide you through the process of securing this type of coverage. Independent insurance agents will help you understand your options, make coverage recommendations and find the best liability policy for your specific needs, ensuring that your assets remain protected.