You’ve got it covered, right? Gentry Locke Partner Matt Broughton Discusses Insurance Policies, Coverage, and Umbrellas

Are you naked?

Are you fully covered?

Look, don’t be embarrassed. I’m talking about insurance. Let me ask again: Are you covered?

In my work, I often talk to clients who don’t have enough insurance coverage. The problem is that many of them didn’t know they were naked — that is, they lacked adequate insurance coverage — until it was too late. They didn’t have enough coverage to protect their family or themselves, or enough to cover claims paid to someone they might have injured in an accident. They didn’t have enough coverage to replace a home that might have been lost in a fire.

They didn’t know what kind of policy they had, they didn’t know what it covered, what the premiums were, or what they were getting for their money. And those people were always shocked — shocked! — when they found out that they didn’t have enough coverage to protect them.

Do you know what’s in your insurance policies? Is it enough coverage? Do you have liability coverage in case you cause an accident that injures another person? Do you have an umbrella insurance policy? Do you even know what an umbrella insurance policy is?

You need to understand the importance of having enough insurance to protect yourself, your family and anyone that you might harm. If you don’t have proper insurance when you really need it, there is nothing you can do to increase your coverage. By then, it’s too late. You’ll have no choice but to launch a GoFundMe page, set up a collection jar in a convenience store, or rely on family to make ends meet.

It’s time to get covered. Let’s discuss some important basics about insurance policies and the kind of coverage you need.

Don’t forget the umbrella!

If you don’t have an umbrella insurance policy, don’t even go to sleep tonight until you get one.

Like the name implies, umbrella insurance offers broad, overarching protection in case you become liable for damages or injuries that exceed your regular insurance coverage. An umbrella protects you and your assets, which could otherwise be at risk.

The Umbrella policy also covers liability for “personal injuries” not covered by other policies.  This includes not false imprisonment and malicious prosecution, but also defamation.  So, if  for example you take out a trespassing warrant against someone and get accused in turn of making a baseless charge, you are covered.  More importantly in this age of social media, if you get sued for posting something – or more commonly, reposting something — that turns out to be untrue, you are covered (such claims are more common than you may think).

Let’s say you are in an automobile accident and become liable for another person’s injuries and expenses, but your automobile insurance policy falls far short of what you owe, then a simple umbrella policy can potentially cover that shortfall.

The cost of an umbrella policy is quite low, especially when considering the amount of protection it provides. With underlying coverage in place, an inexpensive umbrella can give you as much as $1 million or more in extra protection.

Like going to a picnic when there is a chance of rain, don’t go out without your umbrella and keep in mind, like all insurance products, you want to buy an umbrella from a reputable insurance company that does not have unnecessary exclusions.

Check with your trusted attorney to get advice on how big of an umbrella you need to protect you, your family or business.

On the road to adequate auto coverage

Too often, people are way underinsured when it comes to their automobiles.

You should check your policy to make sure you have adequate coverage in case you are in a wreck. If you are responsible for the accident, you will need to have enough liability coverage to pay for any damages to the other person’s vehicle and for any injuries they  may have sustained.

But even if the other person is responsible for the accident, you could still be on the hook for massive medical expenses to treat injuries to yourself or family, if the other person does not have adequate liability insurance (and they rarely do!). Make sure your policy has generous underinsurance provisions which is the part of the policy that protects you, the insured.

Business owners need to make sure they have commercial automobile insurance if their employees drive company cars, or if they use their personal car on company business.

Planes, boats, jet skis … and golf carts

Your new speedboat is not going to be covered by your automobile policy. Neither is your go-cart, jet ski, motorcycle, trailer or the golf cart you tool around in while cruising the neighborhood pretending that you’re at the beach.

You will need specific coverage for those vehicles. Most companies offer policies that cover a number of watercraft so that you won’t be sunk if your party pontoon takes on water. The same goes for other modes of transportation vehicles, such as airplanes and gliders.

Home, sweet homeowners insurance

Your homeowners insurance should be a valued family possession just like grandma’s fine china. Do you know what your homeowners policy covers? What’s the limit on the payout and will that be enough to rebuild your home if — and we hope this never happens — it is destroyed?

What’s your deductible? If your leaky dishwasher wrecks your kitchen floor and causes a big mold problem that the hazmat guys have to clean up, do you have enough money to pay for those repairs out of your own pocket if your deductible hasn’t been reached?

Homeowners liability insurance also covers you in case a person gets hurt on your property and then files a lawsuit against you. Maybe your neighbor won’t sue you if he falls down your icy steps and breaks his back, but you never know. What if your pet dog, cat, snake, etc., bites someone? Are you covered? It is best to have insurance protection in place.

Homeowners liability coverage also applies “off premises” – so if you take your dog to the dog park and he bites someone, or if your college age kid gets involved in a fraternity hazing scandal (also more common than you may think), you are covered.

Know your agent

I cannot emphasize this enough: Do not buy insurance online. You are virtually buying a pig in a poke.

The internet is filled with companies offering cheap insurance. You get what you pay for. Pay cheap premiums, expect cheap coverage. Many online insurance companies offer bare minimum coverage that probably won’t provide enough money should you ever need to file a claim.

I recommend dealing with a local insurance  agent or company who can walk you through all the best insurance options for you and your family. Spend time getting to know your agent. If he or she will not return calls when you are trying to buy coverage . . . can you imagine trying to reach them to file a claim?

So, that covers it. Check over your insurance policies regularly the same way you’d go to a doctor for an annual check-up. In either case, you don’t want to wait too long before you realize you have a serious problem. Take care of yourself and your family today.

And don’t forget your umbrella!

Spread the Word

Share this article and your new knowledge with family and friends. This is incredibly important information that is frequently only learned in the school of hard knocks! Now, you do not have to attend that school.