Getting an Excess Insurance

Everything You Need to Know Before Getting Excess Insurance

Excess insurance is a type of coverage that protects you from losses where your home insurance won’t cover. It’s important to know what to look for before purchasing excess insurance so you don’t find yourself paying for something that doesn’t meet your needs. In this article, we’ll discuss the considerations and tips you should consider when deciding whether or not to get excess insurance.
Getting an Excess Insurance

Pros and Cons

One pro is that it’s usually a cheaper option than replacing your car or other oversized ticket items. Another pro of excess insurance is that you get to choose the limits on how much they’ll cover for any given item in your home.

On the downside, there are some limitations if you’re underinsured by default and don’t have an agent who knows what they’re doing.

For example, most homeowners’ policies will only protect up $100 thousand worth of personal property coverage based on their limit amount – which might not be enough depending on what personal belongings you own (especially as technology changes).

Another downside of excess insurance is that it’s not always the best option for those with a lot of their net worth tied up in the personal property.

For example, if you are someone whose home has $500 thousand value and also owns a couple of hundred grand worth of nice furniture, your limit would only be covered by an insurance policy with as high as 50% coverage which could leave you out-of-pocket on another half-million dollars or more when disaster struck.

What Does it Cover?

Many people ask about whether or not insurance excess cover theft, floods, and other types of natural disasters.

The thing to keep in mind is that the coverage does depend on what type of personal property you are insuring. It also depends on where your home is located – if it’s near a river, then flood protection might be an additional option worth considering depending on how often those areas get inundated by heavy rains every year.

However, it should go without saying that there are things excluded from any policy, including some items like jewelry (unless included as part of the specific rider) since they usually have their separate insurer or carrier.

Alcoholic beverages can’t be insured either, which means that it’s best to keep that at home if you have an extensive collection of wine and beer.

Does an Excess Policy Automatically Cover Any Insurance?

One common misconception is that if you have an excess insurance policy, then it will automatically cover any other insurance or not.

There are usually exclusions that mean when they say “excess” in the title of this kind of coverage, some things are left out. Those can include medical expenses (unless specified), homeowners’ property damage, liability protection (meaning your legal costs as well as injury claims), for example.

In addition to specific items like jewelry mentioned earlier – here too, you would likely want a separate rider or flooring on top of your basic homeowner’s insurance to protect against theft.

It may also be worth mentioning that while certain types of policies come with built-in inflation protections, others do not, so always make sure to ask.

Is it Worth the Cost?

This is a common concern, and it’s probably the most crucial question to answer before you choose.

In general, the higher your insurance premiums1 are, the more coverage you can expect if something terrible happens like theft or fire; but that doesn’t necessarily mean those rates will be worth it for what they cover in total.

You should also factor in how much risk protection you already have with other investments (like home owner’s insurance2) – which could make this unnecessary altogether or only serve as an extra layer of security.

In addition to evaluating whether excess insurance makes sense for someone else considering these perks, another way to look at this subject is from people who currently own their policy and want to know about any changes that may affect them down the line.

What Type Should You Get? 

The first thing you’ll need to consider when getting excess insurance is what type of policy you want.

There are two main types:

Additional coverage for your existing home and auto policies; or

Excess liability with a personal umbrella policy.

Each one has its advantages, but they’re not the same – so it’s essential to know which category fits best before making any decisions about how much protection is necessary.

For example, suppose someone already owns an additional layer of protection on their car through comprehensive or collision coverage (in addition to primary).

In that case, they may only want EXCESS LIABILITY to ensure that there’s no overlap in their strategy. But those who have hit rock-bottom financially could benefit from either option depending more on their needs.

How To Find The Right Cover

The first step is to know the details of your current coverage. For example, you’ll need to understand what types of risks, if any, are not covered under your existing policy before adding on excess insurance for those areas- like damages in a flood zone or injuries caused by an earthquake as examples.

You may also want to consider whether it’s worth securing the extra protection at all since there could be overlaps such as liability and medical expenses that can’t exceed certain limits no matter how much additional coverage someone might have purchased.

Second, a person should get quotes from another Excess Insurance provider so they can find out which company offers them the best price—which will vary based on their specific needs and location. As one last tip, always make sure you read the fine print.

Lastly, a person should also be wary of these as they may not offer much protection from water damage or vandalism and could lead to an increase in premiums.

For this reason, it’s essential that anyone is looking at excess insurance check with their current insurer before making any commitments about adding on extra coverage for those particular items.

Common Questions

Why is my compulsory excess so high?

Do you need the extra insurance when renting a car?

How much is excess protection with enterprise?

What is excess protection insurance?

In conclusion

Should you get excess insurance?

The answer to this question will depend on your specific needs. It’s essential, however, to understand the consequences of getting excess insurance and whether or not it is worth investing in for you.

Now that we have covered some considerations, if a person does decide they want to get more coverage than their current policy offers, then here are three tips:

  • Understand what is covered.

Many items can be considered excess, but they might not all be the same. For example, some policies will cover a water heater while others won’t.

  • Read up on any exclusions to see if you’re potentially going over your current policy’s coverage limits for certain things like theft or fire damage in addition to the list of included extras to avoid making an expensive mistake later and having your claim denied as a result.

Get quotes from various insurance provider so there is no discrepancy about pricing when it comes time to make this decision because prices can vary greatly depending on provider and location

How Much Can You Release?

Use the FREE Calculator Below

Equity Release Calculator

Value Of Your Home?

(Drag the Slider)

0

We Hate Spam as Much as You. 100% Secure.

Top Insurance Articles

How Much Can You Release?

Most people are using Equity Release as a means of retaining the use of their house while also obtaining a lump sum or a steady stream of income. Get matched with an expert and check your eligibility for equity release options.
Use our free equity release calculator & see how much you can release today.

Your Journey to Financial Success Starts Here