ffr crash

[lippy]

Patrick, could you add more color on what this means and how to do it? I have an umbrella but it doesn't reference my Cobra policy in any specific way.

[patrickt]

Originally Posted by lippy

Patrick, could you add more color on what this means and how to do it? I have an umbrella but it doesn't reference my Cobra policy in any specific way.

The insurance carrier that is underwriting the umbrella policy has to know about the risk that is involved with the policy that they are issuing. Obviously, an umbrella policy for the little old lady that drives to church on Sunday is going to cost less than the fella that also moonlights by packing parachutes, hosting fireworks parties, and helps to get rid of the nuclear waste from the local power plant. Make sense?

The reason that example applies to you is that you probably have an automobile policy, a homeowner's policy, and maybe a personal articles floater for your guns/jewelry/coins, all from the same carrier "All-Hands Insurance." In addition, you have an umbrella policy from All-Hands for $5 Million liability and it references your underlying homeowners and auto policy, which is also with them.

Now you go out and buy your Cobra and you get a classic car policy from "ACME Collector Cars" and it's for an agreed value of, say, $90k and it provides for, say, $300k/$500k liabilty coverage. You feel pretty good because you know you also have that $5M policy. You are well aware that if you gork someone out, you are looking at a multi-million dollar payout.

BUT, you have a bad accident and, when you notify All-Hands, they tell you that they were unaware of your Cobra and the collector's policy on it. They then say that the umbrella coverage does not apply to your Cobra. As it turned out, had you notified All-Hands when you bought the Collector's Policy, they would have only charged you $100 more a year to bind coverage from the umbrella to the Cobra's base coverage. But it's too late now.

Moral -- never play "hide and seek" with your insurance agent or your carriers. Make sure they know what they are insuring, and make sure the umbrella policy clearly references the Cobra, and its underlying policy, so that it is obvious and plain to anyone looking at it.