When it comes to protecting ourselves and our families, most of us believe we have everything covered. A homeowner’s or renter’s policy, car insurance, perhaps even life insurance – these plans are essential, but are they enough? Too often, people overlook personal risks that fall “above” or outside traditional policies, leaving them exposed in ways they aren’t even aware they could be.
In this article, we’ll walk through three key personal insurance risks, provide examples to illustrate their potential impact, and highlight coverage options that can offer peace of mind.
Personal Liability Risks
The Risk
Accidents happen, and when they do, personal liability can result in serious financial repercussions. For instance, if someone is injured on your property or if your child accidentally damages someone else’s property, you could be held personally responsible for medical expenses, legal fees, and compensation.
Real-Life Example
Imagine hosting a cookout where a guest trips on your patio or deck, resulting in a severe injury requiring surgery. Without adequate liability coverage, you might have to shoulder tens of thousands of dollars in medical bills and potential legal claims.
Coverage Options
Most homeowners or renters insurance policies offer liability coverage, but the limits might not be sufficient, especially in severe cases. Consider adding an umbrella insurance policy. This provides an extra layer of protection, typically in increments of $1 million, beyond your standard policy limits. Umbrella insurance not only helps with legal fees but covers claims that may not be included in your original policy.
Personal Cyber Risks
The Risk
The digital world offers convenience but also new and evolving risks. From identity theft to online scams, cyber risks can lead to significant financial and emotional distress. Cybersecurity concerns are not just a corporate issue; individuals and families are prime targets for hackers and cybercriminals.
Real-Life Example
Picture this scenario – your email is hacked, revealing sensitive details about your bank accounts. Armed with this information, cybercriminals drain your accounts and commit identity fraud. Worse, they use your information to apply for credit in your name, leaving you with financial chaos to untangle.
Coverage Options
To address personal cyber risks, several insurers are now offering personal cyber liability endorsements or even standalone policies. These policies may include coverage for identity theft restoration, reimbursement for financial losses from cyber fraud, and assistance in dealing with ransomware attacks. It’s worth consulting your provider to understand what is offered and ensure your digital life is safeguarded.
Losses That Exceed Policy Limits
The Risk
Standard policies, such as homeowners or auto insurance, come with specific limits. What many fail to realize is that an incident could quickly exceed these limits, leaving you personally responsible for the difference.
Real-Life Example
You’re involved in a multi-car accident where you’re found at fault, leading to significant damage and multiple injuries. If your auto insurance liability limit is $100,000 and the total claims amount to $250,000, you’re personally liable for the $150,000 gap.
Coverage Options
Again, this is where umbrella insurance comes into play. While it’s often associated with personal liability, it may also step in when existing policy limits for other types of coverage aren’t enough. Umbrella insurance is an affordable way to protect your assets and ensure you’re safeguarded against catastrophic financial loss.
Taking the Next Step
While these risks may seem unlikely, the reality is they’re becoming more common in today’s world. Personal liability lawsuits, cyber threats, and insufficient policy limits can affect anyone. Proactively addressing these risks can help safeguard your financial well-being and give you peace of mind for the future.
Not sure where to begin? Contact Brandon Patterson on our team at 865.453.1414 brandon@ownbyinsurance.com for information on your options.