Insurance Tips – Agent v. PI Lawyer – Pt 2: Umbrella Policies, Collision and Gap Coverages
Personal Injury Attorney Chuck Boyk and Trevor Trudeau, owner of the Coyle Insurance agency are looking out for the best interests of their clients. Part two of their conversation focuses
on the merits of Umbrella Policies, Auto damage protection, and Gap Coverage.
“One of my favorite topics is umbrella policies”, says Chuck Boyk. “An umbrella policy is a million dollars, or more of coverage that covers you for liability on your home, your car, or pretty much any other place you could be negligent. I recommend a million dollars in uninsured motorist coverage on top of that. What percentage of people have an umbrella policy, Trevor?”
“I think the stats are under 1-2%, especially in Ohio,” says Trudeau. “My firm takes a consultative approach, so the idea is to understand what their lifestyle is, and what their assets are. Depending on where they are in their life stage, we want to make sure they’re properly protected. If you have a home that’s a large asset, you want to make sure that is protected along with your auto. For an umbrella liability policy, we’re starting to see those pair up a lot more, and so they’ve gone up a little bit in price. For an entire year, they’re going to cost around $250 – $300. If you add the endorsement for the Uninsured Motorist coverage it is going to be an additional $100 to $200 per year depending on the company. So maybe like $500 a year total.”
“From my perspective,” replied Chuck Boyk, “if you are hit by one of the people who has no insurance coverage and you have catastrophic injuries, if you don’t have the uninsured umbrella policy, you’re going to go bankrupt because you’re simply not going to have adequate coverage. And for $500 to protect you and your family, I think it’s a bargain.”
Trevor Trudeau says, “I completely agree especially if you’re going to pay for the umbrella policy, you might as well pay for something to protect you too.”
“What about collision coverage on your car?” asked Mr. Boyk.
“If you have a brand-new car, you need it, but if you have an older car it may be more of a question. I recommend full coverage,” explains Mr. Trudeau, “Because the repair or replacement cost is going to be way higher than your deductible. Most standard deductibles are $500-$1000, and that is a lot easier to chew than paying full price to replace your car.”
“A lot of people that don’t have insurance coverage are not good drivers,” replied Chuck Boyk. “If they hit you and you don’t have Collision coverage, you get you get the thrill of buying a brand-new again car on your dime.”
“Exactly!” answered Trevor Trudeau. “You hope everyone’s going to do the right thing, but the hit and run-off opportunities… If that happens to you in a parking lot, you want to make sure you are adequately covered.”
“We agree on that,” says Chuck. “Now, what do you tell your clients about Gap coverage?”
“I recommend it, especially for a new vehicle,” says the insurance agent. “Say you buy a vehicle for $25,000, that’s what your loan amount is. Once you drive the vehicle off the lot it depreciates, so now the vehicle is only worth 20,000 for fair market value. Gap coverage is going to cover that difference between the 25,000 and the 20,000. Typically you want to make sure you get Gap coverage when you buy a brand new vehicle and have it for at least two to three years because that’s when it’s actually going to pay out so I recommend anyone that has a brand new vehicle to buy it or buy from the insurance carrier because the dealerships is going to charge you 10 – 15 times more than what the carrier will charge.”
“What about with leased vehicles?” asked Chuck.
“I recommend that too,” says Trudeau. “You’re supposed to keep them in good order in good condition, and the whole value of the vehicle is tied to that depreciation, so you want to make sure that you’re covering that entire policy.”
