/ By Paul Nelson / General Liability • Home Insurance • Insurance/ 0 Comments

Who Needs a Personal Umbrella Policy?

The short answer

Anyone who owns assets worth protecting — a home, savings, investments, or a future income — should seriously consider a personal umbrella policy. If you were sued and lost, those assets could be at risk.

What is a personal umbrella policy?

A personal umbrella policy is extra liability insurance that kicks in after your home, auto, or other policy limits are exhausted. It typically provides $1 million or more in additional coverage, at a relatively low annual cost (often $150–$300/year for the first $1 million).

Who especially needs one?

You’re a strong candidate for an umbrella policy if any of these apply to you:

Situation Why It Raises Your Risk
You own a home Homeowners can be sued for accidents on their property
You have savings or investments Assets can be seized to satisfy a court judgment
You have a high income Future wages can be garnished if damages exceed your limits
You have teen or new drivers Young drivers are statistically more likely to cause accidents
You have a pool or trampoline These are common sources of injury claims
You coach, volunteer, or serve on a board Activities outside your home can still expose you to lawsuits
You own rental property Tenants or their guests can sue you
You have a large social media presence Defamation claims are increasingly common

Can I be sued even if the accident wasn’t my fault?

Yes. In the U.S., anyone can file a lawsuit against you regardless of fault. Legal defense costs alone — even if you win — can be significant. Many umbrella policies also cover your legal defense fees.

What does an umbrella policy NOT cover?

Umbrella policies do not cover:

  • Your own injuries or property damage
  • Intentional or criminal acts
  • Business-related liability (you need a separate business policy)
  • Damage to your own vehicle or home

How much umbrella coverage do I need?

A simple starting point: your coverage should be at least equal to your total net worth — home equity, savings, investments, and retirement accounts combined.

If your net worth is $400,000, start with a $1 million policy (the most common minimum). The extra buffer accounts for legal fees and future earnings.

Bottom line

If you own anything worth losing, an umbrella policy is one of the most cost-effective ways to protect it. Talk to an insurance advisor to find out how much coverage makes sense for your situation.

/ By Paul Nelson / Business Insurance • Commercial Insurance • General Liability • Home Insurance • Insurance • Renters Insurance • Uncategorized/ 0 Comments

Understanding Liability Coverage

What is liability coverage?

Liability coverage pays for costs you’re legally responsible for if you injure someone or damage their property. It’s one of the most important parts of most insurance policies.

How much liability coverage do I need?
There’s no single right answer, but here’s a simple framework to consider:

State minimums: Most states require a minimum amount — but minimums are often not enough
Your assets: The more you own, the more you could lose in a lawsuit
Your income: Future earnings can also be targeted in a judgment
Your risk tolerance: Higher limits cost more but offer greater protection

General rule: Buy as much liability coverage as you can reasonably afford, at least enough to cover the value of everything you own.

Are state minimum limits enough?
Usually not. State minimums set the floor — the least you’re legally allowed to carry. They’re rarely enough to cover a serious accident or lawsuit. If damages exceed your limit, you pay the difference out of pocket.

When should I consider higher limits?
Consider higher limits if you:

  • Own a home, savings, investments, or other significant assets
  • Have a high income or earning potential
  • Have teenage or new drivers on your policy
  • Own a pool, trampoline, or other “attractive hazard”
  • Frequently host guests at your home

What if I need even more protection?
An umbrella policy provides additional liability coverage beyond your standard policy limits — often $1 million or more — at a relatively low cost. It’s worth asking about if you have significant assets to protect.

Who can help me choose the right limits?
An insurance agent or advisor can review your specific situation — your assets, income, and risks — and recommend appropriate coverage limits. It’s worth having that conversation before assuming the default is enough.

/ By Paul Nelson / Home Insurance • Insurance • Renters Insurance/ 0 Comments

Replacement Cost vs. ACV

On your homeowners insurance policy, you’ll see either “replacement cost” or “actual cash value (ACV)” as the claim payout method for your home and belongings. If your home has been updated (roof, plumbing, heating, electrical) within the last 30 years it likely has replacement cost coverage as a default. With older homes or roofs in bad condition, it’s not uncommon to see ACV coverage.

Actual cash value takes depreciation into account, and is the lesser coverage. Take your 10 year old TV and try to sell it on your own today, and it’ll likely be worth pennies on the dollar compared to what you paid for it. Your 40 year old roof may be worth 10% of what it would cost you to replace with a brand new one.

Replacement cost doesn’t factor depreciation into account. That means your 10 year old tv gets replaced with a brand new equivalent, and your roof does as well.
If it’s an option, you want replacement cost every time on your home and personal property.

/ By Paul Nelson / Car Insurance • Insurance/ 0 Comments

Will a Car Crash With an Animal Raise My Insurance Rates?

 

If a deer jumps out from the side of the road and you crash into it, does that count as an at fault accident and will it raise your rates? The short answer is no, but there’s an asterisk. Your insurance company and DMV knows that often there isn’t much you can do about an animal running in front of your car, and it’s not your fault that they did! It’s considered a “comprehensive” claim, which are not at fault in almost all cases. If you have comprehensive coverage on your car then you’ll have to pay your deductible, and your car will get fixed right up. If you don’t have comp., then unfortunately you’ll have to pay for the repairs out of pocket, because that critter you hit probably doesn’t have enough cash to get it fixed for you.

Photo by Ivana Cajina on Unsplash

So what about the asterisk? If you swerve or try to maneuver away from the animal and run into something else, then it turns into an at fault accident. Once you turn the wheel and try to correct, then you’ve taken an active role in the accident. So as heartless as it sounds, if little Bambi jumps in front of you, you’re better off not trying to avoid it. Swerving away can make a bad situation even worse if you lose control of your car or get into a head on collision.

/ By Paul Nelson / Car Insurance • Insurance • Safety/ 0 Comments

Which Tickets Increase My Insurance Rates?

Not all tickets go onto your DMV report, and not all tickets on your DMV report will impact your rates. So which will? Anything considered a moving violation is going to get you points on your license, and increase your insurance rate. That includes speeding tickets, failure to yield, red light and stop sign violations, DUI’s, reckless driving, and more. The minor citations stay on your record for 3 years, and majors like a DUI will stay on for 5 years. DUI’s also remove your California good driver discount (20%) for 10 years!

So which tickets won’t bump up my rates? Fix it tickets, seatbelt tickets, parking tickets, and surprisingly cell phone tickets don’t for most companies. Cell phone tickets are still recorded on your license and show up on your report, but they don’t actually count as a chargeable moving violation fortunately.

What can you do if you get a ticket? If you haven’t done so in the past 18 months, the DMV lets you go to traffic school to remove 1 minor violation. You can take a course online and submit it to the DMV, but keep in mind that you have limited time to complete it. Check the back of your ticket, and it should say that you have a 90 day window to take traffic school. It’s worth it every time, because even 1 ticket could cost you a thousand dollars or more over 3 years in increased insurance costs!

/ By Paul Nelson / Car Insurance • Commercial Insurance • Home Insurance • Insurance • Renters Insurance/ 0 Comments

How to Make Your Insurance Claim Go Smooth As Butter

 

Insurance claims suck! They’re stressful, slow, confusing, and worst of all you’re filing one because something bad happened. After being part of hundreds of claims, I wanted to put together some of the best practices that we and our clients have used to make them a LOT less painful for everyone.
Probably the biggest time saver of us all is utilizing your insurance company’s in-network companies. Whether that’s an approved auto body shop they work with, a restoration company for your home, or a physician network for workers comp., this is going to save massive time and headaches. Most policies allow you to fix your car or repair your house from whomever you choose, as long as your adjuster approves of the repairs. It can take a week or longer for that negotiation between the adjuster and body shop to get an approval. And that’s before the repairs can even start! When you go with a body shop in their network, the body shop acts as your adjuster, and can start repairs immediately. You’ve saved yourself a week +, and the work is now probably guaranteed for the life of you owning the car. Win-win.

Be flexible for your adjuster. Unless you’re doing something that can’t wait, pick up the phone if they call. They’re probably working on dozens of other claims besides yours, and getting them on the phone is usually pretty tough. They return calls when they have time, and 9/10 times you’re going to get their voicemail if you call them. If you miss their call it coule be hours or a day before you can get back in touch.

To piggyback on the last point; be organized. Have all your questions written down, and go into calls assuming this is your one chance for the day to speak with the adjuster. It might be hours or the next day before the adjuster can get back to you.

/ By Paul Nelson / Flood Insurance • Home Insurance • Insurance/ • • / 0 Comments

Is Water Damage Covered Under My Homeowners Insurance?

The answer is yes…and no. It’s going to depend on what causes the water damage and where it comes from. We’re going to dive into a standard California homeowners policy to answer this. Your policy covers a “sudden and accidental discharge of water”. Here are a couple examples that would fall into that category:

  • A pipe bursts in your wall
  • Dishwasher hookup breaks off and pours water all over your kitchen
  • Washing machine pipe bursts

You can also get coverage for water backup (sometimes called sewer and drain backup). This won’t come standard on your policy, and must be added. It protects you if a toilet overflows while you’re on vacation, or if a sewer or drain backs up. You should add this coverage to your policy 100% of the time!

The key with these is that they happen suddenly, and they’re not a wear and tear issue. Which brings us to what’s not covered:

  • Wear and tear
  • Gradual leaks
  • Leaky faucets

All of these fall into the same bucket of being maintenance or wear and tear problems, and are not covered under your insurance. If your plumbing system is getting up there in age (15 years or more), make sure you have it checked regularly, and fix or replace any problems. Water damage can be dramatically expensive if not fixed quickly. We’re talking thousands or tens of thousands of dollars!

Damage from a flood is also not covered, but can be insured under a separate flood insurance policy. A flood is water that enters your house from the outside, unless related to a burst pipe.

/ By Paul Nelson / Flood Insurance • Insurance • Safety/ 0 Comments

Does My Homeowners Insurance Cover a Mudslide?


Mudslide, mudflow, and earth movement are excluded on just about every homeowners insurance policy in California. Very rarely, an insurance company will offer optional coverage for mudslides, but it’s generally unavailable.

Mudflow is different than a mudslide, and the difference can often times be murky. According to FEMA, Mudflow is defined (in part) as “A river of liquid and flowing mud on the surfaces of normally dry land areas, as when earth is carried by a current of water.”. The difference is a mudslide is more of a dramatic collapse of earth down a mountain side, and mudflows often occur with other flooding conditions. To help protect your home against mudslides, make sure any retaining walls are adequately maintained, and there is plenty of vegetation on nearby hills. Having a healthy amount of tree and plant roots is one of the best ways to keep the soil surrounding your home sturdy and in place.

While there are very few options to insure against mudslides, the good news is you can purchase coverage for mudflow and earth movement. Flood insurance has coverage for mudflow, and earthquake insurance has forms of coverage for earth movement. Policies for each generally start at around $100/yr., and will vary based on your home’s location and specifics.