Here is a question that is asked often and the answer is relatively easy enough to answer.
There are several factors to consider when making this decision and it often is answered by taking a look at what you want to secure:
1. When purchasing auto insurance, consider taking a look at the assets you own is the most important factor. The biggest mistake you can make is looking only at how much you pay for auto insurance and not the limits you have. Sure, you can purchase insurance online from many different direct writers such as GEICO, but a licensed independent insurance agent can tell you how much insurance you need. I've had clients come to me who own a house, two cars, and have children that did buy their insurance online and did not have nearly enough coverage to pay for one accident without exposing their personal assets.
2. When purchasing homeowners insurance, consider how you use your home and what you have on your premises. If you're the type that likes to entertain, or have a pool, or like having the guys over for the game, or have the neighborhood kids over, the $300,000 personal liability limit is not sufficient. We strongly recommend extending your limits to at least $500,000, or even $1,000,000.
3. If you are a professional and your services are responsible for the outcome of many high-valued projects or high valued cases, a limit greater than $1,000,000 is recommended. In some instances, you may be required to carry certain limits to win the bid in order to work.
Higher limits can be extended through primary carriers or umbrella carriers. We all want to be dollar-wise when making our purchasing decisions, but when it comes to insurance, being penny-wise can be extremely costly and make it very difficult to recoup the assets you have worked hard to build up.
Your comments can be sent to ben@zolofrainsurance.com.
Ben
Bob and Mary Alice Ringer have 3 young children at home to care for. They live hectic lives juggling jobs, children and entertaining guests whenever possible.
We recently had the opportunity to review their homeowners insurance after they provided us with their current homeowners declarations page and some specifics regarding the house they live in.
Their current policy had a few issues that we addressed immediately. The first issue was that they had a 5% hurricane deductible instead of a flat deductible for all types of perils. This means that the Ringers would have to pay 5% of their Dwelling Limit for any damages that would be sustained during a hurricane. For most homeowners, if you have a 5% hurricane deductible, you're looking at paying for at least the first $10,000 for these type of claims.
The second issue was that their personal liability limit did not match how they live. Since they are a growing family and entertain on their premises when they can, they should carry at least $500,000 of personal liability coverage. The benefit of increasing this limit to $500,000 far exceeds the annual cost in the event of an untimely event.
The third issue was that the incumbent carrier was recently downgraded by A.M. Best. A.M. Best is one of the insurance industry's leading rating bureaus. The financial stability of an insurance carrier should be weighted greatly when making a purchasing decision. Even if the carrier is backed by the State's Guarantee Fund, the claim process can get hectic if administered by State authorities.
The last issue was price. We were able to get the coverage replaced by an A+ Rated insurance carrier while removing any type of hurricane deductible and increasing their personal liability limit to the highest amount of $500,000 (on a primary homeowners policy) and we were able to save them 40% this year!
The Ringers plan on using this money to have an even bigger and better annual Halloween party.
Your comments can be sent to ben@zolofrainsurance.com.
Ben
