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Umbrella insurance needed on secondary residence?

Posted: Sun Apr 28, 2019 11:17 am
by luke_airig
I have an umbrella insurance scenario that I would like some feedback on.

I currently have auto liability insurance and homeowner insurance on my
primary residence. I also have a 1M umbrella policy. These policies are with company A.

The umbrella policy has a section titled 'DESCRIPTION OF KNOWN EXPOSURES'.
My two vehicles and my primary residence are listed in this section.

I am also a co-owner on a second single family home which is a secondary
residence (non-rental property) insured with company B.

If I am sued for an incident that occurs at my secondary residence, which
is not listed as a known exposure on the umbrella policy, will the umbrella
policy cover this incident? Or do I need to add it to the umbrella policy?

It seems to me that the umbrella policy should cover me for ANY liability claims
that may occur, regardless of where they occur.

TIA

Luke

Re: Umbrella insurance needed on secondary residence?

Posted: Sun Apr 28, 2019 11:24 am
by cheese_breath
My guess is they won't cover something that happens at the 2nd residence. If they had known about it they might have charged a higher premium to compensate for the additional exposure.

But you can always ask them unless you're afraid they'll tell you something you might not want to hear.

Re: Umbrella insurance needed on secondary residence?

Posted: Sun Apr 28, 2019 11:24 am
by ResearchMed
luke_airig wrote:
Sun Apr 28, 2019 11:17 am
I have an umbrella insurance scenario that I would like some feedback on.

I currently have auto liability insurance and homeowner insurance on my
primary residence. I also have a 1M umbrella policy. These policies are with company A.

The umbrella policy has a section titled 'DESCRIPTION OF KNOWN EXPOSURES'.
My two vehicles and my primary residence are listed in this section.

I am also a co-owner on a second single family home which is a secondary
residence (non-rental property) insured with company B.

If I am sued for an incident that occurs at my secondary residence, which
is not listed as a known exposure on the umbrella policy, will the umbrella
policy cover this incident? Or do I need to add it to the umbrella policy?

It seems to me that the umbrella policy should cover me for ANY liability claims
that may occur, regardless of where they occur.

TIA

Luke
The umbrella policy specifically states the "known exposures". That is what they will cover, UNLESS you find wording explicitly stating they would *also* cover "other exposures", in which case, why did they specify the known exposures?
Otherwise, people could "hide" all sorts of other risk simply by not listing them.

You need to ask the insurance agency about this, and if you want to feel covered for "other" risks, I'd sure want that in writing somewhere.

RM

Re: Umbrella insurance needed on secondary residence?

Posted: Sun Apr 28, 2019 1:07 pm
by RickBoglehead
Correct. They won't pay a dime for issues at second residence and they will raise your rate when they learn of it.

Re: Umbrella insurance needed on secondary residence?

Posted: Sun Apr 28, 2019 1:10 pm
by miamivice
Ask your insurer.

For example, what if you ski into another person on the ski hill, and the other skier is paralyzed? That is not listed as a known exposure but one that you want your umbrella insurance to cover.

Re: Umbrella insurance needed on secondary residence?

Posted: Sun Apr 28, 2019 1:47 pm
by Svensk Anga
I notified my Umbrella insurer when we added a second home. They did increase the premium, but the amount was small.

You are not getting full value for the policy if you leave this exposure undisclosed.

Re: Umbrella insurance needed on secondary residence?

Posted: Sun Apr 28, 2019 6:36 pm
by MP123
It probably depends on what state you live in and the fine print in the policy.

I'd ask your agent. It probably won't cost much more if it even costs anything. But not telling them about the second home might be leaving a big hole in your umbrella.

This is the time to find out, not when you need it.

Re: Umbrella insurance needed on secondary residence?

Posted: Sun Apr 28, 2019 10:46 pm
by TheCowbell
Has anyone ever used their umbrella, or heard of someone that has?

I have one because for $180 per year it seems like a "why not" CYA expense. But, I do wonder if it's a foolish purchase every year, and a major cash-grab by insurance companies.

In the above skiing example, would it even pay out?

Re: Umbrella insurance needed on secondary residence?

Posted: Mon Apr 29, 2019 9:59 am
by smackboy1
miamivice wrote:
Sun Apr 28, 2019 1:10 pm
For example, what if you ski into another person on the ski hill, and the other skier is paralyzed? That is not listed as a known exposure but one that you want your umbrella insurance to cover.
Think of the insurance as having 2 components: personal liability protection + premises liability protection. Personal liability follows the person around. Premises liability stays with the property.

Skiing into another person is an issue of personal liability - a person's negligent actions. If there was a dangerous condition with the ski slope, that falls to the resort's premises insurance.

Someone slips and falls down the icy steps at the ski house that's premises liability - a dangerous condition on the property. If somebody pushed them down the stairs, that's personal liability.

Re: Umbrella insurance needed on secondary residence?

Posted: Mon Apr 29, 2019 10:40 am
by tadamsmar
I have an umbrella policy with RLI. My homeowner's policy is with Amica and my auto policy is with USAA.

My umbrella policy does not have a list of known exposures, but it does include a questionnaire that I filled out that list the number of residences I own and other information me.

I once countersigned on a car loan to my daughter. RLI somehow detected my action and sent me a cancelation notice effective on my next yearly renewal date. (I may have also been added to the car title, not sure.) At the next renewal, I filled out the questionnaire to include the car and that cleared up the matter.

Since then, I notify RLI of anything new that affects my exposure.

I got the umbrella insurance via USAA but the insurance company is RLI.

Re: Umbrella insurance needed on secondary residence?

Posted: Mon Apr 29, 2019 12:45 pm
by SimonJester
TheCowbell wrote:
Sun Apr 28, 2019 10:46 pm
Has anyone ever used their umbrella, or heard of someone that has?

I have one because for $180 per year it seems like a "why not" CYA expense. But, I do wonder if it's a foolish purchase every year, and a major cash-grab by insurance companies.

In the above skiing example, would it even pay out?
Someone posted on this board they had an incident where their policy paid out to their umbrella limits, so it does happen...

Keep in mind for $180 a year you are also likely to be getting legal representatives from the insurance company...

Re: Umbrella insurance needed on secondary residence?

Posted: Mon Apr 29, 2019 1:32 pm
by Stinky
MP123 wrote:
Sun Apr 28, 2019 6:36 pm
It probably depends on what state you live in and the fine print in the policy.

I'd ask your agent. It probably won't cost much more if it even costs anything. But not telling them about the second home might be leaving a big hole in your umbrella.

This is the time to find out, not when you need it.
+1

I’d definitely make sure that the umbrella coverage is fully in place.

In my view, umbrella coverage is one of the best kinds of insurance. I pay a tiny little premium each year to protect me against an extremely unlikely event, the consequences of which could be catastrophic. Excellent use for insurance.

Re: Umbrella insurance needed on secondary residence?

Posted: Mon Apr 29, 2019 2:05 pm
by tadamsmar
TheCowbell wrote:
Sun Apr 28, 2019 10:46 pm
I have one because for $180 per year it seems like a "why not" CYA expense. But, I do wonder if it's a foolish purchase every year, and a major cash-grab by insurance companies.
The rates are set by the market, I assume. You can shop around.

My policy has had the effect of informing me of my liability exposure and I value that. I had loaned out an old canoe and never thought about the liability of ownership. I learned from having umbrella insurance that I could be liable if I co-signed a loan for a house or car.

This article argues that umbrella insurance is not worth it if you are retired on a fixed income with modest means:

https://clark.com/insurance/5-insurance ... aste-your/