Gulfshore Insurance > Gulfshore Blog > Personal Insurance

Personal Lines A Key to Wealth Preservation Umbrella Liability ProtectionIn today’s litigious environment, successful clients are growing increasingly concerned about becoming the target of a costly lawsuit, yet many remain ill-prepared for such an occurrence. Typically, insurance policies (e.g. homeowners, automobile, and watercraft) include initial limits of “primary” liability that respond to legal judgments. However, these are commonly limited to $300,000 or $500,000, making them inadequate in today’s litigious society where multi-million-dollar judgments are all too common. An Excess Liability or “Umbrella” policy kicks in when a lawsuit judgment exceeds the limit on homeowners and auto policies. We recommend clients consider the maximum net worth they are willing to risk should such a lawsuit occur. We can place up to $100,000,000 in personal umbrella, and our recommendation is to maintain Excess/Umbrella Liability protection at a minimum limit of $5,000,000.

Below are just a few examples of why coverage limits matter.

Type of Loss: Liability
Description: Worker handling renovations at insured’s home fell 12 feet from a ladder, suffering serious head and brain injuries.
Verdict/Settlement: $11,000,000 *Plaintiff alleged dangerous work conditions as contributing factor to fall.

Type of Loss: Liability
Description: A neighbor was leaving a neighbor’s yard and tripped and fell over tree roots protruding through the ground. The fall caused a fractured hip, necessitating surgery and the use of a walker for the rest of his life.
Verdict/Settlement: $2,100,000

Type of Loss: Liability
Description: Child injured in swimming pool accident; resulted in permanent paraplegia.
Verdict/Settlement: $13,000,000

Type of Loss: Auto
Description: While test driving a new car, driver lost control and crashed, killing the salesman who was the passenger in the vehicle.
Verdict/Settlement: $13,700,000 *Wrongful death lawsuit by salesman’s family.

Type of Loss: Watercraft
Description: Insured’s boat collided with another boat, killing a passenger in the other boat. The passenger was a co-owner of a successful business and high-income earner.
Verdict/Settlement: $6,500,000 *Insured’s $5,500,000 limit was inadequate and held personally responsible for $1,000,000.

There are two key components that should be included in a comprehensive Excess/Umbrella policy:

  1. Uninsured/Underinsured Motorist – This important protection is provided under most primary Automobile policies. It ensures that a household member will be covered for injuries he/she receives from a negligent driver. In the event of a qualifying accident, the insurance company will pay the difference between what the uninsured/underinsured driver can pay and what the injured driver would be entitled to as if the uninsured motorist had proper insurance in effect (coverage also applies in “hit-and-run” accidents). We encourage every client to purchase additional limits of protection, which are available as an endorsement to the Excess/Umbrella policy. This additional protection covers the bodily injury damages they cause you or a family member.
  2. Ensuring a Proper Defense – Most clients are unaware of how their defense would be managed by their insurance company in the event of a lawsuit brought against them or a family member. Three specific items to request include:
    • Outside the Limits – All covered defense costs are “outside” the limit of Excess/Umbrella coverage, thus preserving the full Excess/Umbrella coverage limit for judgments against you.
    • Expanded Defense – A sub-limit of coverage will apply to the reasonable expenses for your preferred law firm to review and consult on the defense offered by the policy.
    • Reputational Damage – Some policies will also provide a sub-limit to cover the fees of a public relations firm to protect your reputation within your community.

 

Remember, coverage needs evolve over time. It is critical to inform a trusted insurance advisor of any related exposures that you or your clients may have.

Andrea Pelletier, CPRIA, CPIA is Client Advisor and Partner at Gulfshore Insurance specializing in Private Risk Services. Andrea works with successful individuals and their families on creating and customizing package insurance solutions in the areas of luxury homes, car collections, jewelry, fine arts, watercraft, and personal excess liability. Comments and questions are welcome at apelletier@gulfshoreinsurance.com

Gulfshore Insurance is a Naples, Florida based insurance agency specializing in home and homeowners insurance, car and auto insurance, boat and yacht insurance, property insurance, umbrella insurance, valuables insurance for fine art, jewelry, wine, and more. Navigating insurance requires an experienced and trusted insurance agent who understands your high net worth risks and exposures. Gulfshore Insurance services Naples, North Naples, Port Royal, Park Shore, Pelican Bay, The Moorings, Naples Beach, Marco Island, Bonita Springs, Sanibel Island, Captiva, Fort Myers, Sarasota, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.

Personal Lines Second Home Risk Management StrategiesWhether it is a beach house, mountain getaway, or snowbird retreat, every second home has its own unique characteristics and usage patterns that need to be understood when designing an insurance policy and risk management plan.

There are four key areas that owners should understand when protecting their second homes:

  • Occupancy Status
  • Property Risk
  • Liability Risk
  • Risk Management

 

Second Home Occupancy Types


The occupancy type of a second home will depend greatly on the intended use of the property by the owner. There are several different uses for second homes, which are listed below along with the risks that are associated with their occupancy types.

  • Family vacation homes. Vacation homes are used solely by the family and friends of the owner of the home. These homes are generally occupied a small percentage of the year for vacations. When a vacation home is unoccupied, even a small loss can turn into a major problem because no one is there to identify it.
  • Investment property. Homes that are purchased as an investment are intended to be sold for a profit. Owners of these homes may spend considerable sums to renovate them prior to selling. These homes are generally unoccupied, under renovation, and for sale during the owner’s involvement with them, leaving them open to significant risks.
  • Long-term rental properties. Long-term rental properties are leased to tenants for months at a time. Leases are typically from 6 to 12 months in duration. When a homeowner rents a property to a tenant, they become a landlord to that tenant with a responsibility to maintain the home to ensure it is safe for the tenant. A dwelling fire policy is an appropriate policy for this type of home.
  • Shortterm rental properties. Short-term rental properties are rented to tenants for a minimum of one night but could be rented for a much longer time frame. The purpose of these properties is to yield a profit for the homeowner by renting the property as often as possible throughout the year. This arrangement is classified as a business, and the insurance policy needs to cover the commercial aspects of this type of property.
  • Homes under major renovation/construction. A second home might be an 1800s farmhouse in need of a major renovation or a custom home built from the ground up. The challenge with insuring these homes is the renovation or construction that will occur prior to the homeowner moving in. The major risks to these homes include active construction risks (e.g., power tools, demolition, etc.), it is an unoccupied home/structure during construction, it is an attractive nuisance for passersby that could lead to vandalism or a liability concern, building materials may be left unattended, etc. These situations need special attention with respect to the insurance program.

Property Damage Risk from Natural Disasters


Many people choose to purchase their second home in an exotic location: near the beach, in the mountains, near rivers and lakes, or in remote locations. In addition to the picturesque views these properties offer, they may also come with a high exposure to natural disaster or catastrophe risk. Oceanfront properties face the risk of flooding and wind damage caused by high winds and hurricanes every year. Homes located in arid climates are exposed to wildfire activity during periodic droughts, and properties near a fault line may be damaged when an earthquake strikes.

The important thing to understand when purchasing a second home that is exposed to natural disaster or catastrophe risk is that special insurance will need to be purchased to cover these risks. For example, a home near the beach may need a separate policy to cover wind and flood damage. A home located near a fault line may need a separate policy to cover earthquake damage. These coverages will add to the cost of the insurance plan but are critical to the home’s protection.

Liability Risk at Second Homes

Liability insurance provides important protection for homeowners. This protection will pay legal defense costs and damages awarded by lawsuits brought on by an injury or property damage caused by negligence. Second homes carry significant liability risks that could relate to swimming pools and spas, outdoor sports courts, and tenants or renters. Whatever the exposures are for a second home, they need to be considered in the policy design process to ensure proper coverage is in place.

Risk Management for Second Homes

Once a policy is designed, the final step is to incorporate intelligent risk management strategies and technologies to help predict, prevent, and mitigate potential future losses. Here is a quick overview of some of the strategies and technologies that are being used to protect second homes.

  • Hire a property management company to monitor and preserve the property.
  • Turn off the main shutoff valve for the water when the home is not in use.
  • Be wary of social media posts that indicate a property is unoccupied.
  • Ensure all doors and windows are closed and locked when the home is not in use.

Insuring secondary homes can be a complex process. It takes a clear understanding of the property characteristics and insurance company guidelines to deliver a well-crafted insurance program. Working with an insurance agent who specializes in insuring second homes is the best way to ensure the second home is properly protected.

Kevin Havemeier is an Associate Client Advisor at Gulfshore Insurance specializing in Private Risk Services. Kevin works with successful individuals and families with complex insurance needs. He analyzes his clients’ risks and collaborates with them to design customized solutions with the goal of ultimately delivering peace of mind. Comments and questions are welcome at khavemeier@gulfshoreinsurance.com

Gulfshore Insurance is a Naples, Florida based insurance agency specializing in home and homeowners insurance, car and auto insurance, boat and yacht insurance, property insurance, umbrella insurance, valuables insurance for fine art, jewelry, wine, and more. Navigating insurance requires an experienced and trusted insurance agent who understands your high net worth risks and exposures. Gulfshore Insurance services Naples, North Naples, Port Royal, Park Shore, Pelican Bay, The Moorings, Naples Beach, Marco Island, Bonita Springs, Sanibel Island, Captiva, Fort Myers, Sarasota, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.

Personal Lines Loss Prevention for High Net Worth ExposuresThere is no question that successful individuals and families have always treasured the aesthetic value of their homes and collections of artwork, wine, classic cars, antiques, and other collectibles. Too often, homeowners fail to protect their most prized possessions through proper loss prevention. Risks from water damage, sun exposure, careless transport, and improper storage could severely damage a collection and leave the homeowner with significant financial and emotional loss. The best way to protect a home and property is to prevent losses from ever happening in the first place. Below are several critical components to a comprehensive loss prevention program.

 

Home Inventory
An updated home inventory may be the single most important step available to protecting valuable items. The inventory represents the starting point for proper protection. Should a loss occur, keeping an inventory will also make the insurance claims process much easier.

Risk Management Appraisals
Gulfshore Insurance utilizes our proprietary Personal Risk Assessment to identify clients’ unique risks and exposures, while uncovering their preferences and expectations should a future loss occur. We analyze existing insurance policies to identify potential gaps in coverage and highlight program deficiencies that expose clients to unnecessary loss.

Water and Gas Shutoff Devices
Did you know that water is the number one threat of damage to luxury homes? And in most cases, water damage is preventable. Every year more than 2.5 million homeowners fall victim to water damage exceeding billions of dollars in preventable losses. Reputable water mitigation vendors can install sensors around appliances where water leaks commonly occur, thus avoiding costly claims.

Infrared Home Examinations
Utilizing infrared cameras to identify hidden hazards such as moisture in the walls, hot circuit boxes, or electrical panels can be an important step in your overall loss prevention program. It is important to correct these problems before they become expensive issues that turn into a homeowners’ insurance claim.

Home Safety & Security Assessments
Gulfshore Insurance can help facilitate locating and selecting a reputable third-party vendor that specializes in loss prevention services. These professionals will assess your home; address any issues related to the home’s structural integrity, safety, and security; and make recommendations on how to best protect your assets.

Disaster and Emergency Preparation
Preparedness should be paramount for those living in hurricane‐prone states. From hurricane shutters to family and valuables evacuation plans, there are many things you can do to avoid potential damage and be ready to evacuate should the need arise.

Employee Background Checks
When it comes to protecting your loved ones and your possessions, additional considerations are necessary, such as training domestic staff in the management of deliveries, visitor emergency procedures, and first aid. Background screenings of those staff members employed or contracted are also crucial.

 

Ron Lazarto, CPRIA is a Client Advisor and Partner at Gulfshore Insurance specializing in Private Risk Services. Ron specializes in offering customized property and casualty insurance solutions for successful individuals and their families. Comments and questions are welcome at rlazarto@gulfshoreinsurance.com

Gulfshore Insurance is a Naples, Florida based insurance agency specializing in home and homeowners insurance, car and auto insurance, boat and yacht insurance, property insurance, umbrella insurance, valuables insurance for fine art, jewelry, wine, and more. Navigating insurance requires an experienced and trusted insurance agent who understands your high net worth risks and exposures. Gulfshore Insurance services Naples, North Naples, Port Royal, Park Shore, Pelican Bay, The Moorings, Naples Beach, Marco Island, Bonita Springs, Sanibel Island, Captiva, Fort Myers, Sarasota, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.

Personal Lines Flood Insurance Considerations for Waterfront PropertiesIf you already own a waterfront property, then you are likely familiar with flood zones and flood insurance. If you are someone who is considering the purchase of waterfront property, then now is to time to get familiar with this coverage. Flood risk across the continental U.S. is concentrated along coastlines, and no state has more vulnerable beachfront miles than Florida. Most waterfront properties are considered high risk for flooding, just because of their proximity to the water.

Flood or “rising water” is not a peril that is covered under your typical homeowner’s insurance policy. Flood coverage is purchased as a separate stand-alone policy. The vast majority of all flood policies are purchased through the National Flood Insurance Program (NFIP) which is administered by the Flood Emergency Management Agency (FEMA); however, private options are also available. How much that insurance costs all comes down to the elevation of the building and the characteristics of the flood zone that it resides in.

Properties with direct ocean access are most often located in VE or AE flood zones. These high-risk zones require an elevation certificate before Primary FEMA Flood or Excess Flood quotes can be provided. The elevation certificate provides the base flood elevation as determined by FEMA in addition to the elevations of the garage, machinery, and first-floor living level. Some homes in these areas have elevated living levels which adds to the complexity of the underwriting process. For all areas below the base flood elevation, it’s necessary to confirm whether or not the enclosure is properly vented (in AE zones) or has breakaway walls (in VE zones).

Coverage for waterfront properties can be expensive and intricate, so we recommend looking into this. Interested buyers should be familiar with the complete scope of the house and all that it entails. When your buyers have questions about insuring their coastal property, turn to Gulfshore Insurance for answers. It’s critical to check with an agent early to verify the flood zone and elevation to avoid any surprises after a purchase contract is in place.

Andrea Pelletier, CPRIA, CPIA is Client Advisor and Partner at Gulfshore Insurance specializing in Private Risk Services. Andrea works with successful individuals and their families on creating and customizing package insurance solutions in the areas of luxury homes, car collections, jewelry, fine arts, watercraft, and personal excess liability. Comments and questions are welcome at apelletier@gulfshoreinsurance.com

Gulfshore Insurance is a Naples, Florida based insurance agency specializing in home and homeowners insurance, car and auto insurance, boat and yacht insurance, property insurance, umbrella insurance, valuables insurance for fine art, jewelry, wine, and more. Navigating insurance requires an experienced and trusted insurance agent who understands your high net worth risks and exposures. Gulfshore Insurance services Naples, North Naples, Port Royal, Park Shore, Pelican Bay, The Moorings, Naples Beach, Marco Island, Bonita Springs, Sanibel Island, Captiva, Fort Myers, Sarasota, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.

Personal Lines Uninsured Motorist Coverage Why You Should Have It Gulfshore Insurance Naples FloridaAccording to the Insurance Information Institute, Florida has the MOST DRIVERS in the country on the road without auto insurance, at a whopping 26%. That means that if you are injured in an auto accident in Florida, you have more than a 1 in 4 chance of being hit by a driver who has no insurance to cover your injuries. In addition, 51% of Florida auto insurance policies have limits of $25,000 per person or lower. If you are hurt or injured in a car accident by one of these uninsured (no insurance) or under-insured drivers (not enough insurance), you may have to pay for your own injuries out of pocket.

UM and UIM insurance is so important to have because it pays if you, your passengers, or family members are injured by another driver who is “at-fault” and does not have bodily liability insurance, has insufficient liability insurance to cover the total damages sustained by you, or no insurance at all. This applies whether you are riding in your car, someone else’s car or are struck by a car while a pedestrian. UM/UIM pays for medical expenses, lost wages and for bodily injury, sickness, disease or death resulting from a car accident, beyond your PIP auto coverage. In Florida, “UM” (uninsured motorist) or “UIM” (underinsured motorist) coverage is limited to what you have set as your BI (bodily injury liability) coverage. In other words, you can purchase UM/UIM only at the same limit that you also carry BI.

Why should I buy uninsured motorist coverage if I have medical insurance?

Medical bills are only a portion of what you can claim on uninsured motorist coverage. UM also pays for things that may not be covered or limited by medical insurance, such as:

  • loss of the future enjoyment of life
  • lost wages and disability
  • long term nursing care
  • wheelchairs and medical devices
  • pain and suffering
  • death
  • replacement services for things you are no longer able to do

 

At Gulfshore Insurance we pride ourselves on serving as your trusted advisor. Please contact us with any questions.

Andrea Pelletier, CPRIA, CPIA is Client Advisor and Partner at Gulfshore Insurance specializing in Private Risk Services. Andrea works with successful individuals and their families on creating and customizing package insurance solutions in the areas of luxury homes, car collections, jewelry, fine arts, watercraft, and personal excess liability. Comments and questions are welcome at apelletier@gulfshoreinsurance.com

Gulfshore Insurance is a Naples, Florida based insurance agency specializing in home and homeowners insurance, car and auto insurance, boat and yacht insurance, property insurance, umbrella insurance, valuables insurance for fine art, jewelry, wine, and more. Navigating insurance requires an experienced and trusted insurance agent who understands your high net worth risks and exposures. Gulfshore Insurance services Naples, North Naples, Port Royal, Park Shore, Pelican Bay, The Moorings, Naples Beach, Marco Island, Bonita Springs, Sanibel Island, Captiva, Fort Myers, Sarasota, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.