Frequently Asked Questions

• General FAQs
• Auto FAQs
• Homeowner FAQs
• Life FAQs
• Renters FAQs
• Umbrella FAQs

General FAQs

Q: What kinds of questions should I be expected to answer when I apply for an insurance policy? Why do insurers need so much information?

A: When you apply for an insurance policy, you'll be asked a number of questions. Among other things, the agent might ask you your name, age, gender, and address. You'll also be asked a number of other questions which will be used to determine how likely you are to make a claim.

When an insurance company is deciding whether or not to offer automobile insurance to a potential customer, they will want to know about the person's previous driving record, whether they have any recent accidents or tickets, and what type of car is to be insured.

Insurance companies have different programs for different customers. Adults with good driving records will generally pay less for auto insurance than a young driver with traffic tickets will. In order to determine which program you qualify for, an insurance company needs basic information about you.

In addition to your age, gender, and driving experience, they will also need information about the vehicle you drive and how you drive it to determine a fair price. For example, a large luxury car costs more to repair or replace than a sub-compact, and someone who commutes 30 miles each way is more likely to be in an accident than someone who rides the bus to work and drives only on weekends.

Q: What are the advantages to using a Nevada Federal Insurance Agent to purchase insurance?

A: By using a Nevada Federal Insurance Agent to purchase your insurance, our members receive more personal service. An agent with whom there is direct contact can be vital when purchasing a product and absolutely necessary when filing a claim. A local independent Nevada Federal Insurance Agent is able to deliver quality insurance with competitive pricing and local, personalized service.

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Auto FAQs

Q: I have an older car that currently has a very low market value. Do I really need to purchase automobile insurance?

A: Most states have insurance laws that require drivers to have at least some automobile liability insurance. These laws were enacted to ensure that victims of automobile accidents receive compensation when their losses are caused by the actions of another individual who was negligent.

It's often the case that the cost of repairing the damages to an older car is greater than its value. In these cases, your insurer will usually just "total" the car and give you a check for the car's market value less the deductible. Many people with older cars decide not to purchase any physical damage coverage.

Q: What's the difference between Collision Physical Damage Coverage and Comprehensive Physical Damage Coverage?

A: Collision Physical Damage Coverage is defined as losses you incur when your automobile collides with another car or object. For example, if you hit a car in a parking lot, the damages to your car will be paid under your collision coverage. Comprehensive Physical Damage Coverage provides coverage for most other direct physical damage losses you could incur, including theft. For example, damage to your car from a hailstorm would be covered under your comprehensive coverage.

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Q: What factors can affect the cost of my automobile insurance?

A: A number of factors can affect the cost of your automobile insurance, some of which you can control and some that you can't.

The type of car you drive, the purpose the car serves, your driving record, and where the car is garaged can all affect how much your automobile insurance will cost.

Even your marital status can affect your cost of insurance. Statistics show that married people tend to have fewer and less costly accidents than single people do.

Q. What should I do if I'm involved in an accident?

A: The first priority is the condition of those involved. Call for medical help if anyone at the scene is injured. Notify the police as soon as possible. Obtain the names, addresses, and telephone numbers of all persons involved, including passengers and witnesses, and the license plate numbers of all other cars involved.

It's best not to admit an accident was your fault, even if you think it was. A simple apology can be construed as an admission of fault. Let the authorities determine who was responsible. Auto accidents can be disorienting even if you are not physically injured. You may not be aware of all factors leading up to the crash, so state only what you know about what happened. Contact your insurance company as soon as possible, even if damages were minor.

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Q. What does it mean when a car is "totaled"?

A: After an accident or theft recovery, if the insurance company decides your car is "totaled," it means the estimate of repairs exceeds the car's value. At this point, the insurance company will likely send you a check for your car's value. It gets to keep your car unless you make arrangements to buy it back "as is".

Q. What should I do if another driver hits my car?

A: If you were not at fault in the accident, you will make a third-party claim to the at-fault driver's insurance company. Because you are the claimant, the insurance company typically will issue the check directly to you. It's your responsibility to pay the repair shop, and the lender if you have a car loan. If the other driver doesn't have insurance, your uninsured motorist coverage will take effect.

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Q. How do I handle a claim if I cause an accident?

A; If you own your vehicle and have collision insurance, you will file a first-party claim with your insurance company. It may issue a check either to you, the shop that repairs your vehicle, or to both of you. If you have a lease or a loan, the lending institution may be named on the check. Of course, you will also have to pay your deductible. If other vehicles were involved, the insurance company will settle with the other drivers and you probably won't be involved.

Q. What happens if my car is stolen?

A: If your car was stolen, be prepared to wait. Most insurance companies will impose a waiting period to see if the police recover your car. If your car is still missing after the waiting period, usually 21 days, you should receive a settlement soon after. If your car is recovered during the waiting period, the insurance company will want to see a repair estimate before deciding how to proceed. If your policy has a provision for replacement transportation, you may be required to pay for a rental car out of your own pocket and then submit a claim to the insurance company for reimbursement.

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Q. What effect does my driving record have on my auto insurance?

A: A good driving record is critical to your ability to obtain auto insurance. If your past is free of tickets, accidents, and drunk driving arrests, chances are excellent that you will pay much less than the person who has a history of these infractions.

Q. Does the kind of car I drive matter to an insurance company?

A: Yes! In addition to your age and driving record, the type and value of the car you drive is one of the most important factors in the amount of your premium. Sports cars, for example, can cost significantly more to insure because they may be a favorite among thieves, because statistically people tend to drive them faster, and because they may have a higher replacement cost than a sedan or a van.

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Q. Why would I want to buy more insurance than state law requires?

A: If you are found to be liable for an amount greater than the coverage limits of your policy, you must pay the difference. If you don't have enough cash, the injured party can go after your home, financial assets, and even future earnings. It's wise to consider increasing your liability limits when you own a house or other valuable assets.

Q. Why does a high deductible cause my premium to go down?

A: Generally, the more risk you assume, the less risk you assign to the insurance company, which charges according to how much risk it is insuring against. A deductible is the initial dollar amount of a loss that you must assume before the insurance company will pay your claim. Auto insurance deductibles typically range from $250 to $1,000.

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Q. Why does my insurance company want to know my age?

A: Statistically, the risk of an automobile accident fluctuates with age. Teenagers are among the most expensive drivers to insure because their inexperience makes them more likely to be in an accident than drivers over age 25.

Just as a teenager will have to pay more for being young and inexperienced, drivers can expect to pay less as they reach the age range where they are statistically the safest on the road, roughly from ages 40 to 55. In some cases, rates may go up as a driver becomes elderly.

Q. Can I insure my boat?

A: Yes. Recreational boat insurance is similar to automobile insurance. You can purchase liability coverage and physical damage coverage. Some policies also offer medical payments, uninsured boater coverage, and legal defense coverage. If you borrowed money to buy the boat, your lender will probably require you to carry insurance.

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Q. I am retired, but I work part-time as a handyman. Do I need special insurance coverage for my truck, which I use when I'm hired to make repairs?

A: Generally, a personal auto policy may be all you need unless you are driving other people around frequently. In some cases, an independent contractor such as a carpenter or landscaper may need a commercial policy – if the vehicle is used more than 50 percent of the time for business purposes. And personal auto policies must have increased limits to cover any equipment that is permanently attached to the vehicle, such as an expensive generator.

Q. I have towing and labor coverage on my auto policy. Does it only come into effect after an accident?

A: Towing and labor coverage provides emergency road service and pays for towing charges. This coverage is not limited just to accidents, but can be used any time your car breaks down. Labor such as a tire change or battery jump-start performed at the site of a disabled vehicle will be covered, but not the later repair work performed in a service station.

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Q. What is the difference between the cancellation and non-renewal of an auto policy?

A: A non-renewal means only that your company does not want to offer you a policy any longer – possibly because of your driving or claims record over the last three to five years. More than likely, you will find other insurers that are willing to provide insurance at a higher price.

Auto insurers may cancel your policy at any time if you fail to pay your premium, lose your driving privileges, or have not accurately reported the facts relating to your level of risk. A cancellation will make it hard to get insurance for a long time to come.

Q. My state requires minimum insurance coverage of 15/30/5. What does that mean?

A: Minimum liability limits of 15/30/5 refers to $15,000 bodily injury liability per person, $30,000 per accident, and $5,000 for property damage. Insurance requirements vary from state to state.

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Q. I have heard of states with no-fault laws and PIP coverage. How does that differ from states with standard coverage?

A: There are some states with various forms of no-fault insurance. Generally, no-fault laws require each person involved in an auto accident to pay his or her own medical expenses and lost wages – and stricter versions disallow certain pain-and-suffering lawsuits. Therefore, many no-fault states require drivers to have Personal Injury Protection (PIP), which pays extensive medical expenses, lost wages, and a small death benefit for the driver and all passengers. PIP usually comes with a 20 percent deductible. In some states, both no-fault and PIP coverage are optional.

Q. I plan on driving through several states during my next vacation. I carry the minimum coverage allowed by my state, but will my insurance cover me if I have an accident in another state while I am away?

A: Clearly, the laws concerning insurance coverage can vary greatly from state to state. It might be comforting to know that if you have the minimum auto liability coverage for your home state, but are involved in an accident in another state, your policy will generally adjust to meet that state's minimum legal requirements.

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Q. Can a driver be found partially to blame for an automobile accident?

A: In some states, comparative negligence laws make it possible for more than one driver to share responsibility. If a red car is driving too fast and rear-ends a blue car, but the blue car did not have functioning taillights, then the red car may be found 70 percent responsible and the blue car 30 percent. A driver may only collect damages for the percentage of the accident that was not his or her fault, so the driver of the blue car could recover only 70 percent of the damages.

Q. What types of coverage are generally included in a standard personal auto policy?

A: Bodily Injury Liability – Pays for medical expenses, legal expenses, and judgments against you when you or your car is involved in an accident that causes the injury or death of another person.

Property Damage Liability — Pays for damages to the property of others, caused by you or your vehicle. Uninsured/Underinsured Motorist (UM/UIM) – Covers the costs associated with damage or injury caused by an uninsured, underinsured, or hit-and-run driver.

Medical Payments — Covers the medical bills of you and your passengers after an auto accident, regardless of who is at fault.

Collision — Covers the damage to your vehicle resulting from a collision, regardless of who is responsible. Collision coverage requires the payment of a deductible by the insured.

Comprehensive Physical Damage — Pays for damage to your car that is not the result of an auto accident, such as theft, vandalism, fire, hail, natural disasters, hitting a deer, etc. Comprehensive coverage also requires a deductible, and will only pay as much as the car was worth before sustaining the damage.

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Homeowner FAQs

Q: What are some practical things that I can do to lower the cost of my homeowners insurance?

A: There are a number of things you can do to lower the cost of your homeowners insurance. The easiest thing to do is get a comprehensive review of your policy and needs from your local Nevada Federal Insurance Agent.

It's not surprising to find quotes on homeowners insurance that vary by hundreds of dollars for the same coverage on the same home. When you shop, be careful to make sure each insurer is offering the same coverage.

Another way to lower the cost of your homeowners insurance is to look for any discounts that you may qualify for. For example, many insurers will offer a discount when you place both your automobile and homeowners insurance with them. Other times, insurers offer discounts if there are deadbolt exterior locks on all your doors, or if your home has a security system. Be sure to ask us to look into these discounts for you.

Another easy way to lower the cost of your homeowners insurance is to raise your deductible. Increasing your deductible from $250 to $500 will lower your premium, sometimes by as much as five or ten percent.

Q: What does homeowners insurance cover?

A: The typical homeowners policy has two main sections: Section I covers the property of the insured, and Section II provides personal liability coverage for the insured. Almost anyone who owns or leases property has a need for this type of insurance. Usually, homeowners insurance is required by the lender to obtain a mortgage.

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Q: What is the difference between "actual cash value" and "replacement cost"?

A: Covered losses under a homeowners policy can be paid on either an actual cash value basis or on a replacement cost basis. When "actual cash value" is used, the policy owner is entitled to the depreciated value of the damaged property. Under the "replacement cost" coverage, the policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.

Q: What factors should I consider when purchasing homeowners insurance?

A: Here's a checklist of things you should consider when you purchase homeowners insurance:

1. Determine the amount and type of insurance that you need. The coverage limit of your house should equal 100% of its replacement cost. If your policy limit is less than 80% of the replacement cost of your home, any payment from your insurance company will be less than the full cost to replace your home. You'll have to pay the rest out of your own pocket. Also, decide if the personal property and personal liability limits are adequate for your needs.
2. Determine which, if any, additional endorsements you want to add to your policy. For example, do you want the personal property replacement cost endorsement, an earthquake endorsement, or a jewelry endorsement?
3. Once you've decided on the coverage you want in your homeowners insurance policy, consult us. We'll be able to help you determine if there are any gaps in coverage you might not have been aware of and explain the details of the policy's exclusions and limitations, as well as recommend an insurance company that will live up to your expectations.

Q: What are the policy limits (i.e., coverage limits) in the standard homeowners policy?

*Note: this answer is based on the Insurance Services Office's HO-3 policy.

A: The dwelling and other structures on the premises are protected on an "all risks" basis up to the policy limits. "All risks" means that unless the policy specifically excludes the manner in which your home is damaged or destroyed, there is coverage. The policy limit for the dwelling is set by the policy owner at the time the insurance is purchased. The policy limit for the other structure is usually equal to 10% of the policy limit for the dwelling.

Losses to your personal property are covered on a "named perils" basis. "Named perils" means that you have coverage only when your property is damaged or destroyed in the manner specifically described in the policy. The policy limit on the coverage is equal to 50% of the policy limit on the dwelling. Limits for the coverage for the additional expenses that the policy owner may incur when the residence cannot be used because of an insured loss is equal to 20% of the policy limit on the dwelling.

The coverage limit on personal liability is determined by the policy owner at the time the policy is issued. The coverage limit on medical payments to others is usually set at $1,000 per injured person.

Q: Where and when is my personal property covered?

A: Personal property (except property that is specifically excluded) is covered anywhere in the world. For example, suppose that while traveling, you purchased a dresser and you want to ship it home. Your homeowners policy would provide coverage for the named perils while the dresser is in transit, even though the dresser has never been in your home before.

Q: Do I need earthquake coverage, and how can I get it?

A: The standard insurance policy does not pay for direct damages caused by earth movement. "Earth movement" is a much broader term than "earthquake". It includes earthquakes, volcanic activity, and other types of earth movement. This coverage may be available by endorsement for an additional charge. If you live in an area that's more likely to have an earthquake, you'll pay more than if you live in an area that is unlikely to have one. We can help you weigh the costs and benefits of this coverage before you decide to purchase.

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Home Insurance FAQ's

Q. Why should I buy homeowner's insurance?

Q. What is a deductible?

A: Deductibles place responsibility for the initial cost of certain claims – and some of the risk – back on the insured. Basically, a deductible is the amount you must to pay out of pocket before the insurance company will step in and pay for the loss of your property. Your deductible has a direct effect on the amount of your premiums. The higher the deductible – that is, the more you have to pay out of pocket – the lower your premiums will be.

Q. How much will I pay for homeowner's insurance?

A: To set the amount of your premiums, the issuing company will first want to assess what kind of risk you might present. Be prepared to share plenty of information about you and your home. The company will consider your credit rating, whether you have a criminal record, your previous addresses, and if you have a history of insurance claims. An insurer will want to know what kind of work you do, your employment history, your marital status, and your age. An insurer will also want to know about the construction of the home. Is it brick or wood? How many square feet is it? How old is it? Are there any unattached structures on the parcel? How far is the house from a fire station? Is it perched on a cliff above the ocean? Deadbolt locks, smoke detectors, and other preventive measures can lower your rates. But certain kinds of pets, a pool, and other potential opportunities for personal injury can raise your rates. So can running a home business.

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Q. How can I lower my premium?

A: If you want to lower your monthly premium, or buy more coverage for less money, one way is to carry a higher deductible. A higher deductible also may make sense if you believe that your chances of making a claim are remote enough to warrant assuming extra financial risk.

Q. What if I'm found liable for injuring another person?

A: As long as the injury was due to your negligence and was not intentional, your homeowner's policy should cover any medical bills and legal expenses, up to the liability policy limits.

Q. What kinds of damage does a basic homeowner's policy cover?

A: Most basic policies protect against damage from:

• Fire and lightning
• Windstorm and hail
• Explosion
• Riot and civil commotion
• Aircraft
• Vehicles
• Smoke
• Vandalism and malicious mischief
• Theft
• Damage by glass or glazing material that is part of a building
• Volcanic eruption

You can also step up coverage to include:

• Falling objects
• Weight of ice, snow, and sleet
• Three kinds of water-related damage from home utilities or appliances
• Electrical surge damage

Protection is subject to policy limits and deductibles can vary.

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Q. What damage to my house would not be covered by my homeowner's policy?

A: It depends on the type of policy you own. But in general, unless you buy additional coverage, you won't be compensated for losses due to floods, earthquakes, nuclear accidents, wars, intentional damage, and normal wear and tear. Other exclusions may also apply.

Q. If my home burned to the ground, how much money would the insurance company pay me per my policy?

A: Insurance companies normally use one of two methods to figure how much you will be reimbursed for a loss per your policy provisions. The most common calculation is the actual cash value, which is the replacement value minus depreciation. The second calculation is simply the replacement cost of the lost property with no depreciation, but usually with a maximum value. Also, don't forget that the company will subtract the amount of your deductible from the settlement.

Q. How will I be able to recall the contents of my home if it is destroyed?

A: It's wise to generate a detailed list of your possessions. Making a video or photographic record of your possessions is advisable, as well. You may want to consider storing your inventory in a safe-deposit box off your property, or at least in a lockable fireproof storage box in your home. Not only will a record of your possessions take most of the guesswork out of filing a claim, police say such documentation can help you prove ownership in case your belongings are recovered from a thief. Also, you may want to videotape or photograph the mess after a disaster and before you begin the cleanup. This can help you prove the extent of damage without having to wait to get your life back in order.

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Q. What can I do about expensive possessions, like jewelry and camera equipment, that are far more valuable than the coverage limits of my homeowner's policy?

A: You can purchase additional coverage, through an endorsement to your existing policy or with a separate policy, to extend the limits of coverage for specific items.

Q. I want to buy a condominium. Will my homeowner's policy be different from the one I had when I owned a house?

A: Insuring a condominium is different from insuring a house because of the way ownership is structured. A homeowner's policy covers against losses, and you can only suffer a loss if you have ownership. Because there are areas of common ownership in a condominium complex, your homeowners association may have a master policy. The extent of the coverage you buy will depend on what the master policy covers. The standard homeowner's policy for condominiums is called HO-6. It will likely cover your personal property, shield you and your family from some types of liability, plus pay to repair any portion of the unit you own under the terms of the condominium or cooperative documents.

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Q. I'm renting an apartment. Will my landlord's insurance cover my belongings if the building burns down?

A: If you rent an apartment or a house, the building owner is responsible for any perils that befall the property. Rest assured, if the place burns down, your landlord's insurance is responsible to compensate him for damage to the structure. But if your personal belongings – your furniture, your stereo, your clothing – are destroyed, it's you who loses unless you have renter's insurance. Renter's insurance is a kind of homeowner's policy for non-homeowners. It contains most of the same provisions of a basic homeowner's policy, except the part that covers the home itself. Up to certain limits, a renter's policy covers your personal belongings against destruction or theft, and protects you against claims of liability if you cause injury to someone or an individual's property.

Q. Besides me, who else is covered under my homeowner's policy?

A: In general, a homeowner's policy will have a named insured, which is usually the owner or tenant named on the deed or lease. The named insured's spouse is covered as well, even if he or she is not named on the policy declaration. Other users and residents also may be covered to a lesser extent by the personal property and liability provisions in the policy. For instance, the insured's children or someone under 21 in the insured's care would likely be covered. Employees such as gardeners or housekeepers may also be covered against loss of personal property on the premises. And you may also extend coverage to your guests if you make a request to your insurance company in advance.

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Life FAQs

Q: How much life insurance should an individual own?

A: Rule of thumb suggests an amount of life insurance equal to 6-8 times annual earnings. However, many factors should be taken into account when determining the right amount of life insurance for you and your family.

Important factors include:

• Income sources (and amounts) other than salary/earnings
• Whether or not you're married and, if so, what your spouse's earning capacity is
• The number of individuals who are financially dependent upon you
• The amount of death benefits payable from Social Security and from an employer-sponsored life insurance plan
• Whether any special life insurance needs exist (e.g., mortgage repayment, education fund, estate planning need, etc.)

Calculating the correct amount of life insurance to buy is not as simple as it appears. We recommend contacting us for help determining the right amount of coverage. As independent agents, we are unbiased advisors who will help you avoid buying too much, show you appropriate optional coverage for your need, and recommend a company that will best serve your interests.

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Q: What about purchasing life insurance on a spouse and/or children?

A: In certain circumstances, it may be advisable to purchase life insurance on children; generally, however, such purchases should not be made in lieu of purchasing appropriate amounts of life insurance on the family breadwinner(s).

It's of utmost importance that the income-earning capacity of the primary breadwinner be fully protected, if possible, through the purchase of the required amount of life insurance. This should be done before contemplating the purchase of life insurance on children or on a non-wage-earning spouse. Life insurance on a non-wage-earning spouse is often recommended for the purpose of paying for household services lost due to this individual's death. In a dual-earning household, it's important to protect the income-earning capacity of both spouses.

Q: Should term insurance or cash value life insurance be purchased?

A: This is a difficult question which can only be answered depending on your personal circumstances.

First, recognize that in any life insurance purchasing decision, two questions must be answered:

1. 1. How much life insurance should I buy?
2. What type of life insurance policy should I buy?

Question #1 should always be resolved first. For example, the amount of life insurance that you need may be so large that the only way you can be afford it is through the purchase of term insurance, since term insurance has a lower premium.

If your ability to pay life insurance premiums is such that you can afford the desired amount of life insurance under either type of policy, it is then appropriate to consider the second question: what type of policy to buy. Important factors affecting this decision include your income tax bracket, whether the need for life insurance is short-term or long-term (e.g., 20 years or longer), and the rate of return on alternative investments possessing similar risk.

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Q: How does mortgage protection term insurance differ from other types of term life insurance?

A: The face amount under mortgage protection term insurance decreases over time, consistent with the projected annual decreases in the outstanding balance of a mortgage loan. Mortgage protection policies are generally available to cover a range of mortgage repayment periods, e.g., 15, 20, 25, or 30 years. Although the face amount decreases over time, the premium usually remains the same. Further, the premium payment period often is shorter than the maximum period of insurance coverage. For example, a 20-year mortgage protection policy might require that level premiums be paid over the first 17 years.

Q: Can an existing life insurance policy be used to provide for the repayment of an outstanding mortgage loan?

A: Yes. An existing policy, either term or cash-value life insurance, can be used for many purposes, including paying off an outstanding mortgage loan balance in the event of the insured's death. Although a lender may offer a mortgage protection term policy to you, the lender rarely requires it.

Credit life insurance is frequently recommended in conjunction with the taking out of an installment loan when purchasing expensive appliances or a new car, or for debt consolidation.

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Renters FAQs

Q: Why would I want to buy renters insurance?

A: If you live in an apartment or a rented house, renters insurance provides important coverage for both you and your possessions. A standard renter's policy protects your personal property in many cases of theft or damage and may pay for temporary living expenses if your rental is damaged. It can also shield you from personal liability. Anyone who leases a house or apartment should consider this type of coverage.

Q: How does a renters policy protect my personal property?

A: A renters policy provides "named perils coverage". This means that the policy only pays when your property is damaged or destroyed by any of the ways specifically described in the policy. These usually include:

• Fire or lightning
• Windstorm or hail
• Explosions
• Riots
• Aircraft
• Vehicles
• Smoke
• Vandalism or malicious mischief
• Theft
• Falling objects
• Weight of ice, snow, or sleet
• Accidental discharge or overflow of water or steam
• Freezing
• Sudden and accidental damage from artificially generated electrical current
• Volcanic eruptions (but this doesn't include earthquake or tremors)

Renters coverage applies to your personal property, no matter where you are in the world. This means you're covered when you are on vacation as well as at home.

Q: Why do some apartment complexes require tenants to have renters insurance?

A: Owners of apartment complexes buy insurance policies for their liability and to cover their buildings and personal property. However, these policies do not cover any of the tenant's property or liability. By requiring their tenants to have renters insurance, the apartment owner is assured that the tenants will not mistakenly believe the apartment complex owner's policy will provide coverage for a tenant's property or personal liability. Although this type of requirement benefits that apartment complex owner, there are benefits to the renter as well. We recommend that you purchase renters insurance regardless of what your landlord requires.

Q: What if I share my apartment with a roommate? Do we both need to have renters insurance?

A: Standard renter's policies cover only you and relatives that live with you. If your roommate is not a relative, each of you will need your own renter's policy to cover your own property and to provide you liability coverage for your own actions.

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Umbrella FAQs

Q: What is a personal umbrella liability policy?

A: A personal umbrella liability policy is designed to increase your liability protection. This single policy acts as an "umbrella" over all of your other personal liability policies (home, auto, boat, RV, etc.) so that you have a higher personal liability limit than what would otherwise be available. In certain circumstances, an umbrella policy may provide personal liability coverage that is otherwise excluded from your other policies. For example, an umbrella policy provides coverage anywhere in the world, whereas your auto policy usually provides coverage in the U.S. and Canada only.

Q: How do I know if I need a personal umbrella liability policy?

A: It used to be that the only people who needed personal umbrella liability policies were wealthy individuals who had sizable amounts of personal assets that would be at risk in a lawsuit. However, in our very litigious society, even individuals with modest incomes and assets are often subjects of large lawsuits. Since they are even less able than a wealthy individual to pay large damage awards, they recognize the need to have coverage limits greater than what can be obtained from their homeowner or auto policies.

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