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 Posted: Fri Apr 24, 2009 5:24 am Post subject: Umbrella policy for homeowners |
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I’m a first time home buyer. I’m curious to know whether homeowners policy is sufficient to cover all the risks that may put me in trouble. Some of my friends have suggested me about umbrella policy. But I really don’t know what it is and how can I benefit from it.
Any help would be great.
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Cathy Turner
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| Posted: Fri Apr 24, 2009 10:57 am Post subject: |
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Honestly the umbrella policy would offer the extra layer of coverage over an above the policy liability limit. Therefore, if you ever get sued where the compensation amount is likely to cross your homeowner policy limit the umbrella insurance policy would provide the additional protection.
Another thing with the umbrella insurance is that it’s inexpensive. Therefore, one may manage coverage level of $1 million with additional cost of $150 to $300 a year. However, the coverage level and would cost would largely vary amongst the carriers.
~Jeremy |
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JeremyHolter
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| Posted: Fri Apr 24, 2009 11:05 am Post subject: |
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One point I would like to add to the post made by Jeremy.....umbrella insurance also provides protection against libel and slander lawsuits.
Another important thing to remember that umbrella insurance benefits would be available only after the HO policy limit exceeds. Further, the insurers may ask you to meet certain criteria before they could sell umbrella insurance to you.
Carrying higher liability limit on the homeowner insurance may minimise the need of umbrella policy. But you better discuss the matter with your agent. |
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jeorge
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| Posted: Fri Apr 24, 2009 11:09 am Post subject: |
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Cathy, if you have assets to protect you would need umbrella insurance. Otherwise, you may be at a riks of losing your valuable possessions in a lawsuit.
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Karen
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| Posted: Sat Apr 25, 2009 9:13 am Post subject: |
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| Quote: | | Cathy, if you have assets to protect you would need umbrella insurance. Otherwise, you may be at a riks of losing your valuable possessions in a lawsuit. |
If I'm understanding properly then if you don't have anything valuable then buying umbrella policy is wastage of money. Please correct me if I've got it wrong.
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Cathy
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| Posted: Sat Apr 25, 2009 9:25 am Post subject: |
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| Quote: | | If I'm understanding properly then if you don't have anything valuable then buying umbrella policy is wastage of money. Please correct me if I've got it wrong. |
Nope Cathy, it doesn’t work that way. Lemme put forward few questions to you,
* Are you a wage earner?
* Do you have a piece of antique rug in your home?
* Investments and bank accounts
* Home equity, which is your share in the house
If your answers to these questions are ‘yes’ then you may need to evaluate your requirement of umbrella policy. |
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jeorge
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| Posted: Sat Apr 25, 2009 9:38 am Post subject: |
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Hey, I've heard that in a settlement the claiment can get only the policy limit of the insured and not more. If that is ture then why one should be worried about getting sued and pay for the additional coverage.
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anonymous 12
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| Posted: Sat Apr 25, 2009 9:45 am Post subject: |
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Hi Cathy
| Quote: | | I’m a first time home buyer. I’m curious to know whether homeowners policy is sufficient to cover all the risks that may put me in trouble. |
Let me also tell you that while homeowners insurance will cover a lot of things that you can think of, it will not cover damages related to flood, earthquake and damage as a result of negligence in maintenance. For these you need to purchase additional policies.
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sil
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| Posted: Sat Apr 25, 2009 9:54 am Post subject: |
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Anon, many a times you must have seen people winning judgement over another and even garnishing their wages. IMO in these days of rising medical expenses the medical bills even for a minor fall can easily exceed the liability limit. The umbrella insurance policy would come handy in this time of distress and can save you from losing your home/car or wage.
Think about it!
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Karen
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| Posted: Tue May 05, 2009 1:52 pm Post subject: |
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| so even umbrella insurance policy can't protect us from damages related to flood, earthquake whatever by bad weather or natural disastrous? |
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tohawk
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| Posted: Tue May 05, 2009 6:23 pm Post subject: |
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as far as i know natural disasters such as floods and earthquake, particularly these two are always sold as the additional coverage and are not covered under the insurance policy..
But yes there are few types that are covered under natural disaster which you need to check with the agent and on the policy dox..
Takin in to consideration the love for the lawsuits in America... i guess Umbrella insurance is a very good option.. unless you feel that little extra amount you shell out is a burden...
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gnp
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| Posted: Tue May 05, 2009 7:12 pm Post subject: |
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umbrella policy is placed by lenders on all seconds, condominiums, townhouses and PUDS, it does cover Hazard, Earthquake is not necessary will be covered in it… Its placed when the borrower dsnt have ins or has not informd the lender that he has insurance.. its as good as having a home owners insurance..
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gnp
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| Posted: Tue May 05, 2009 7:12 pm Post subject: |
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All US houses req a mandatory Hazard ins.. then depending upon their location they need other additional policies like houses in a flood zone need flood ins, earthquake zone need dat particular ins.. and these areas are infrmd by the FEMA ie federal emergency management agency
i guess that answers the natural calamity queries......
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gnp
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| Posted: Wed May 06, 2009 8:25 am Post subject: Umbrella policy for homeowners |
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Hi,
This is with regards to cathy's quest.
Ya your home owners policy will be sufficient to cover most of the risks and loss.
However the Umbrella insurance policy is placed by the lender
this happens in situations where a borrower does not have an insurance policy or fails to provide his policy details to the lender..
The Lender has interest in the property and to protect the same they set you up for an insurance policy, ie called the umbrella policy..
The umbrella policy actually covers more than what you homwowners policy will do..
Its just that you will have to pay the insurance premium to you lender.
It does cover more than the liabiliy limit and gives coverage over the law suite as well..
Thanks |
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DJ
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| Posted: Fri May 08, 2009 11:48 am Post subject: |
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Okay DJ, this is an interesting statement.
| Quote: | However the Umbrella insurance policy is placed by the lender
this happens in situations where a borrower does not have an insurance policy or fails to provide his policy details to the lender.. |
Does it mean that one can purchase umbrella policy without buying standard HO plan? |
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kelvin
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