4 Tips for Buying Umbrella Insurance

Umbrella insurance is a line of coverage that is dedicated to covering items your other lines miss. The term "umbrella" describes the way this portion of your policy is a catchall for a variety of claims. Umbrella insurance can help cover you from key, unexpected claims. However, if you are not smart about purchasing the coverage, you may end up spending unnecessary funds on a line of coverage you do not need. 

#1 Analyze Current Coverage

You should first determine the items you are already covered for. Seeing what your policy truly covers will help you learn the areas where you may need additional protection. Many people think they are aware of the nuances of their policy, but they do not truly know where exclusions leave them with a gap in their coverage. During your analysis, address specific exclusions. These will be listed at the end of most policies. Make a note of any exclusion you are concerned with. Ask your insurer if an umbrella policy could cover any of these excluded items.

#2 Run a Loss Analysis

A loss analysis is a report of all of your claims to date. Your insurance company can provide you with a list of the claims you have filed with them. It is also possible, though, that you have elected not to file certain claims. Keeping a record of these expenses will help you get a clear picture of how much you spent covering accidents and repairs to your home or business. After compiling this information, look for gaps where your coverage failed to come through. If you had one claim with a large expense that was not covered, pay close attention to why this was not covered. Ask your insurance company if an umbrella policy would cover these previously uncovered claims. When you find out how much the premiums on the policy will be, compare this expense to the funds you’ve lost through uncovered claims. 

#3 Speak with a Claims Consultant

You will have a claims consultant at your insurance company. This person may be assigned to your policy. It is also possible this person will have an expertise on certain types of claims, meaning you may have to speak with more than one individual to get all the answers you are looking for. Ask the consultant about any uncovered expenses on your previous policy. The person should be able to tell you why they were no covered and recommend a way to get the claims covered on your new policy.

#4 Consider a Broker

Insurance brokers are experts on coverage, and they can advise you on how much you should carry in umbrella insurance. These brokers do not work for the insurance company directly; they actually work for you. They will be able to approach multiple insurers to look for the best deal on your behalf. Brokers are usually retained by large companies, but even small operations will recoup the cost of hiring a broker in insurance savings rather quickly. 

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