The Costco Connection - January 2014

costco services

The

best umbrella

you’ll buy

Tablet or smartphone? Scan or click here to watch a short clip on the basics of umbrella insurance. (See page 5 for scanning details.)

Extra insurance coverage can
save you from getting soaked

By Hana Medina

VEER

YOU CAUSE A multiple-car accident resulting in several injuries that racks up $1 million in hospital bills. The problem? Your auto insurance policy will cover a maxiumum of $300,000 per incident. You are found legally obligated to cover the remaining $700,000. Don’t have an extra $700K lying around? Neither do I.

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That’s where umbrella insurance can help. Umbrella insurance may cover the cost of personal liabilities beyond your current auto, home and/or condo insurance policies. “It protects people in case a big event happens. It’s over and above the auto and home policies, which, to me, symbolizes the umbrella,” says Penny Rocque, underwriting supervisor at Ameriprise Auto & Home Insurance.

Since most coverage starts at the $1 million mark, many mistakenly consider umbrella insurance to be for the wealthy. But the truth is, anyone at any income level could benefit. “When people see a $1 million or $2 million policy, they say, ‘I don’t have a million dollars in assets, so why would I even need $1 million in coverage?’” says Erik Simonson, casualty claims divisional manager at Ameriprise Auto & Home Insurance.

Business-related activities are excluded. “You
have to look at the big picture,” he says. If you
get into a liability situation and get sued,
Simonson says, “your wages could be gar-
nished, or they could go after your savings, or
your home equity. ... The goal is to resolve the
situation prior to any litigation, if possible.”
So why don’t more people have it? Rocque
says that, due to human nature, we don’t
think the worst could happen to us. Simonson
adds that because it’s not mandatory like auto
insurance, or home insurance if you take out
a mortgage, people don’t want to pay for
something they don’t think they need.
Despite offering coverage in the millions
of dollars, umbrella insurance is surprisingly
affordable. “A general umbrella policy is
going to be a few hundred dollars, per year,”
Rocque says. The rate varies based on indi-
vidual needs, history and where
the member resides.
Auto incidents are by
far the most common use
of umbrella insurance, says

Simonson. He states that despite cars being safer than ever before, serious injuries and fatalities are still a grim reality of driving, and due to the rising costs of healthcare, the standard auto insurance policy may not be sufficient.

Home claims make up a smaller piece of the pie, but Simonson says many of those incidents involve falls, dog bites, pool and trampoline accidents, and even some cases of social media slander and defamation.

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In addition to considering umbrella insurance, Lisa Castaneda, manager of Costco Services, recommends reviewing your insurance policies every three to five years to stay informed of what’s covered. “People get married, divorced, buy new cars, homes, do remodeling or even add something like a security system, and you don’t know if you’re getting the right amount of coverage, or the best rates,” she says.

far the most common use

He explains that umbrella insurance doesn’t cover the cost of replacing your home or vehicle (that’s what your current home and auto insurance are for); it may cover the leftover cost of an at-fault accident or injury. SHUTTERSTOCK.COM

Costco offers a variety of insurance options to fit members’ needs: • Personal health

• Mexico traveler auto insurance Insurance offerings are not available in all states. Visit Costco.com and click on “Services” for details. Need insurance?

• Dental
• Business health and dental

Understanding your current coverage will help you assess how much umbrella insurance you may need. Costco offers umbrella insurance policies with coverage from $1 million to $5 million through Ameriprise at competitive rates. “You do have to have a Costco–Ameriprise auto insurance policy to purchase umbrella insurance, and make sure you have adequate home insurance liability coverage as well,” says Lisa.