The Real Estate Browser Volume 9, Issue 3 | Page 12

12 — Say you saw it in The Real Estate Browser of Lynchburg — Volume 9 Number 3
www.LynchburgRealEstateBrowser.com
Why A Personal Umbrella Policy? Part II
by Al Baughman, AIM, LUTCF, Baughman & Associates
In last month’s article we
explored the financial rea-
sons for purchasing a Personal
Umbrella Policy. We reviewed “real life” examples
of catastrophic claims and “head spinning” settle-
ments that auto and homeowners have faced. For the
record, we agreed that no two umbrella policies are
alike!
In an auto scenario, an umbrella policy should
be designed to serve two functions…significantly
increase the limit of liability (beyond the underlying
limits of one’s personal lines policy) AND provide
Excess Uninsured/Underinsured coverage beyond
underlying policy limits. The former protects your
assets when the verdict is ruled against you (judg-
ment exceeds your underlying auto policy limits),
while the latter protects you from those who drive
without insurance or carry limits of liability less than
yours. Like the underlying policies, umbrellas usual-
ly have a deductible that is referred to as a “Retained
Limit or Self-Insured Retention amount”.
We recently conducted a phone survey with a
sample of Lynchburg direct writers and independent
agencies to determine their familiarity with umbrel-
las and how they marketed the protection. While
findings mirrored the results of an earlier in-house
survey of “clients new to our agency”, it became read-
ily apparent that agencies have varying comfort levels
with this topic.
Given the differences between policies from one
company to the next, it is incumbent upon the con-
sumer to do their homework. From a professional
perspective, both coverages are equally important as
they protect one’s assets as a whole, regardless of the
scenario (if I am at-fault OR if the other driver is at-
fault). To protect one and not the other doesn’t pass
the logic test!
The Insurance Information Institute recently pub-
lished a study that may surprise you. The article
is titled “Facts+Statistics : Uninsured Motorists”
(August 1, 2017). This “eye opener” revealed that of
the fifty states, Virginia ranked 34th with 9.9 per-
cent uninsured motorists on the highway. This fact
should scare you given that 10% of the drivers you
pass on the highway each day have no insurance!
All the more reason for an umbrella with Excess
Uninsured/Underinsured Motorist coverage!
Curious as to how rates are determined?
Applications are typically five to six pages in length
and cover a myriad of underwriting questions…
underlying policy limits, number/type of vehicles,
ages of drivers, accident/violation history, home/farm
ownership, recreational vehicles and watercraft. One
will find rates to be competitive across the board.
Need more information? We are certainly avail-
able to help! Please call our office and schedule an
appointment for a Portfolio Review. The review is a
systematic analysis of the coverage included in each
of your policies and allows us to identify “gaps” that
could potentially cost you big bucks! We take our
ethical commitment to our clients seriously. You
have my personal guarantee that you’ll receive a
higher level of service from our agency than a 1-800
or on-line provider. The higher standard is not how
fast you perform a task but how thorough you are!
To schedule your “First Time Home Buyers”
consultation, call us at 434 316-0030