by Julie Ngo
Personal Umbrella Excess Liability Insurance – This insurance is designed to provide liability coverage for situations where potential liability could exceed the limits of the protection provided in a typical homeowner’s, automobile, and watercraft policy. Those who have acquired wealth, and individuals practicing certain professions often face such risks simply because they are seen as having the ability to pay. To meet such needs, an individual may want to consider an umbrella excess liability policy.
The term “umbrella” derives from the fact that such policies requie an insured to have a base amount of liability coverage, often in the form of specified policies. In the even of a covered loss, reimbursement comes first from the base policies. Liabillity in excess of the limits of the base policies is then covered by the umbrella or excesss policy, up to its policy limits.
Coverage under the umbrella excess liability policy has two primary goals:
- 1.To provide larger amounts of protection than are available under other policies.
- 2.To broaden the protection, filling in coverage gaps that may exist. Umbrella liability policies generally have fewer exclusions than other policies.
Understand the Policy – An insurance policy is a written contract between the insured and the insurance company. The protection provided by the policy typically represents a significant part of the individual’s overall risk management program. Thus, it is important for an insured individual to read and understand key policy provisions such as the following:
- What losses are covered in the policy? A basic policy may not provide as much protection as is necessary.
- What losses are not covered? For an additional premium, perils or situations not covered can often be added to the pollicy.
- What are the limits of coverage? This refers to the maximum dollar amount the insurance company will pay in the event of a covered loss.
- What are the retention amounts? A retention is a dollar amount or percentage the insured must pay before the insurance company pays its portion of the loss.
- In the event of a loss, what are the duties of the insured? A policy will usually list the steps that must be taken in the event of a loss.
Seek Professional Guidance – Insurance agents and brokers, insurance counselors, and other trained financial consultants ccan help provide answers to detailed questions about a particular policy. These professionals are also helpful in selecting the right policy and the appropriate amount of coverage.
Julie Ngo is a State Farm insurance agent located at 28410 Old Town Front Street in Temecula. She can be reached at (951) 695-2625.