Wednesday, January 23, 2013

Insurance Homework - Follow Up

Six months or so ago I posted about how we were in the process of obtaining life insurance.   And in September, I posted information about an umbrella insurance policy we were investigating.

I pleased to report we can cross these tasks off our "to do" list.

Regarding life insurance, we each obtained $500,000, 20 year term life insurance policy through the private market.  I have a $500,000 life insurance policy through work which is very reasonably priced.  When open enrollment comes around in December 2013 I understand that I can obtain a similar policy on Mr. Sam at similar discounted rates.  So as of now, I have $1 million in life insurance and Mr. Sam has $500,000 in life insurance but we will increase that to $1 million early next year.

As for the umbrella policy, as I previously posted, this process was complicated by the fact that three of our properties are insured through the Florida state insurer of last resort, Citizens.  Citizens insurance policies only provide $100,000 in liability coverage so we had to first obtain a "wrap" policy to increase our liability coverage from $100,000 to $300,000 for these three properties and then we had to obtain the umbrella policy.

We also ended up not including our property up north in our umbrella policy because it was going to cost us a almost $1000 to obtain a regular insurance policy before we obtained the umbrella policy.  Since our property up north has no structure on it, we believe the risk of someone injuring themselves on our property is very low.  Since there is no structure on the property anyone on the property is not an invitee and is trespassing, which while that doesn't mean there is no liability risk, the risk is pretty low.

So overall our insurance costs are going up, but we ended up saving about $1000 per year when we combined our car insurance policies and moved to a new company (we also increased our coverage) last year.  As such, the money saved in our car insurance category is going to cover our umbrella and wrap policies.


Jim R said...

Is the property 'up North' just vacant land? If so, I'd agree its nothing to worry about. If its just a vacant lot with no hazards then I don't see a reason for liability. If it has any kind of hazard like a open pit, barrels of toxic waste, piles of broken glass or an open well then thats another matter. I assume its just vacant land.


Sam said...

Jim, Yes, its just a vacant lot (in a residential neighborhood) and there are no known hazards beyond trees and tree branches. The lot is wooded and there is a chance that a tree could fall over and hit a home on an adjoining lot. The area is wooded in general so there are many trees on the adjoining lots as well. When I'm up for my next visit I've committed to doing a tree health survey to determine if there are any trees in poor condition, but I don't recall seeing any last time I was there (I visit the area once or twice a year). I would have included the lot in our umbrella policy if it were cheaper but with a $1000 cost to insure the property (before the umbrella policy) on a risk assessment we opted not to at this point.

Mrs PoP @Planting Our Pennies said...

Fabulous timing. I just subscribed to your blog the other day.

We're also in FL and we're in the midst of debating (debate actually went live on our site this am) the merits of an umbrella policy that would provide some coverage on the (mostly) vacant lot that we own. It's only structure is a small concrete boat dock that encompasses 0.2% of the lot's area.

Do you mind if I ask what companies you ended up going for with your wrap policy and your umbrella policy? We have a mix of insurers now (we were ALL citizens, but they recently handed one of our properties off to another insurer), and would appreciate any recommendations.

PS - have you shared where in FL you are?

Sam said...

Welcome Mrs. PoP, We are in Palm Beach County and we are east.

I'm not a fan of Citizens, but I would be concerned about the shedding and transferring of policies to new private companies because its my understanding that these private companies won't have to limit rate increases except for the first three years.

We went back and forth on whether to insure our vacant property because it was such an expensive undertaking since we have no insurance on the property at all, so the expensive part would have been obtaining a regular insurance policy with $300,000 liability coverage. In order to get umbrella coverage, you have to have an underlying insurance policy.

Our wrap and umbrella policies are with Lloyds of London, but we just went through our local agent.

Good luck!

Mrs PoP @Planting Our Pennies said...

Ahh, PBC. Gotcha!

Thanks for the info! I have a feeling that we'll be working with our agent on this one, and it may get complicated as the vacant lot currently has no policy of its own.

As for the rate limit increases, our agent assured us that if the rates go up dramatically, we remain eligible for Citizens. Though I'm interested to see if we get back our lanai/pool coverage at renewal with this new company. I don't know if you have those, but Citizens stopped covering them this last summer. (We got our notification prior to our summer renewal.) We tried to apply for a rider for pool/lanai coverage through Lloyd's, but weren't able to find anything reasonable, so we're currently self insuring on the pool/lanai at our primary residence.