Excessive Liability Coverage

We understand a lot of people want to cover themselves in case legal claims are brought against them. For auto insurance this is mandatory, but more often than not we are encouraged to buy excessively.

The higher the limit, the higher the rates but eventually it won’t make any statistical sense for you to pay for more. For example, did you know that less than 5% of accidents result in super large claims?

Put a little trust in yourself and look at the bigger picture. If you’re normally careful and you aren’t known to be accident-prone, don’t go too hard on liability coverage!

Umbrella Coverage

If you have accumulated significant wealth that you want to protect from a lawsuit then getting umbrella coverage might not be a terrible idea. This type of insurance supplements your current policies, meaning that it only kicks in if claims exceed the coverage from your primary insurance. Alternatively, if your primary insurance doesn’t pay in full or cover the contingency, the umbrella coverage might drop down as well.

But let’s face it, it might make more financial sense for you to simply increase the limits on your home, auto, and other individual policies instead of opting for umbrella coverage.

Unnecessary Riders

Make sure you’re not throwing your money on riders you don’t necessarily need. Some may be free, which is fine, but not all of them are.

So what are riders anyway? They can use these to cover exclusions or limitations that your basic policy won’t. With the help of a rider, you’ll get higher limits on jewelry or cover water damage in the basement.

Obviously, some of these may be redundant depending on your situation.