Two Overlooked Insurances That You Should Revisit
While certain types of insurance coverage are generally accepted as necessary, and sometimes even mandatory, there are two less-understood coverages that could potentially provide a lot of value. Let’s talk about the first one: renter’s insurance.
We often hear the objection that renter’s coverage is not necessary because a client doesn’t own very much or has a low net worth. In reality, this coverage helps cover unexpected costs in a number of situations. Yes, it is beneficial for having your belongings repaired or replaced under circumstances like theft, fire, and water damage. But it also provides liability coverage for situations like accidentally damaging someone else’s property, leaving the water running in your bathroom, or having a visitor trip on your area rug. And in the event that you cannot remain at home because of a covered event (i.e. fire), this coverage pays for things like your hotel stay, which could quickly eat away at your savings.
You’ll notice there is a deductible and limit on the coverage so be sure to discuss these details with your financial advisor and/or insurance agent. Also, consider selecting replacement cost vs. actual cash value.
The second insurance coverage we want to shed light on is additional liability insurance. This is referred to as umbrella insurance, or a PLUP (Personal Liability Umbrella Policy). This coverage protects you and the members of your household if you’re found liable for a covered incident by paying medical and legal bills. It offers additional liability protection beyond what your existing auto, home or watercraft policies cover.
When renewing your policies, here are common examples of what a covered incident may include:
- Your car slides on ice and causes damage to another vehicle and creates a pile up.
- You post a negative review of a business online and get slapped with a lawsuit.
- You rent a jet ski on vacation and get in an accident. You’re covered even though you don’t carry recreational vehicle coverage on your auto policy.
- Your teenager throws a party at your house and one of the party guests is arrested for driving under the influence on the way home. You get sued.
- Your dog runs out of the house and attacks a neighbor. The neighbor sues you to cover his lost wages, pain and suffering, and medical bills.
You should know that this coverage extends outside your home and can even include coverage abroad. It’s sold in 1 million-dollar increments, up to $5 million, and is very affordable. Just know that it doesn’t cover certain situations like business losses, intentional acts, damage to your own personal property, and written or oral contracts in place.
Is it time to revisit your need for renters and liability insurance?