Porch Collapse

Here's a question that came into our inbox regarding the liability faced by having a porch at your apartment/condo....

Hi Dan:

I was listening to the radio as I was driving home last night and there was a story about a Chicago apartment's porch falling and injuring 10 people. Who would be liable in this case? Would it be the landlord since it's their property or could the renter be held liable as well? I have a porch and entertain quite often so I want to make sure I'm insured properly.

Thanks!

How to choose Umbrella limits

So we may have advanced past Insurance 101 here with this topic.  Actually, understanding what an "umbrella" is in the first place already puts you in the 200-level.  Now that we know what it is (repeat: liability above and beyond the primary limits on the auto or home policy) we have to decide on a proper amount.

Not to complicate things, but at this point I have to say there is no one right amount. That's sort of cheating, but it's true in that nobody can pick the right amount for you for legal reasons, and everybody is different.  Everybody has a different risk profile so there isn't any "one size fits all" limit.

We'll discuss the general rules of thumb after the jump.

Umbrella Insurance

I wanted to introduce the concept of an umbrella when it comes to insurance.  You may have heard of the term before, but not known what it meant or if it referred to the Travelers umbrella.

An umbrella is additional liability coverage that sits "over top" of your primary liability on your home or renters' and auto insurance. It usually comes in one-million dollar increments up to $5m. The point of an umbrella is to have more protection for current and future assets should there be a lawsuit against you.

Your primary auto and homeowners'/renters' policies have "Personal Liability" or primary liability limits anywhere from $100,000 to $1,000,000.  (We recommend nothing lower than $500k)  The umbrella would sit directly on top of that, effectively extending the amount of insurance available in case of a lawsuit.

The need for an umbrella typically rises as you have more assets to protect and greater ways to put them at risk (i.e. teenage drivers, boats, etc...), but it's always a good idea because the cost is not great compared to the protection given.  Lawsuits can lead to a judgement that will garnish future wages.  So even if you're just renting an apartment now and have one car, don't think for a second that's all you have to lose.  $200 now for a million dollar umbrella is worth it considering what you could lose down the road.

If you have questions please contact me for more information.