A few days ago there was a shocking and disturbing story in the Virginian Pilot about a graduation deck party gone horribly wrong.  According to the article, a second-story deck collapsed during a graduation party injuring seven people. Virginia Beach emergency response assisted several injured guests and the deck structure was inspected by city ordinance to discovery what caused the deck to crumble. Amazingly, no one was killed. However, seven guests were injured. There was no record of there being any reported or documented damage to the deck in any prior city inspections. It just merely crumbled.

As a home owner, stories like this (should!) make you shudder. The liability exposure in this situation is incredibly high. Thank goodness no one was killed in this accident. However, several others were injured. In today’s litigious society, it is likely that bizarre accidents like this could very easily result in a legal suite. While we are in no way assuming that this will happen in this case, in most cases it very often does. So often in fact, that there are legal teams that are entire legal firms who are specializing in “deck collapse” suites. Seriously, Google it. If there is a market enough for law offices to advertise that they cover this sort of catastrophe, then it is well worth a home owner’s time to plan ahead so they have the coverage to protect them.

Accidents happen. Bizarre, un-planned, impossible-to-foresee accidents. Even if you strive to maintain a safe property and avoid unnecessary risks….things still happen. That’s why you need liability protection coverage….and LOTS of it.

On a general home insurance policy you have a portion of your policy that covers liability. Typically on a home policy, your liability limit runs between $300, 000- $500, 000. In this recent occurrence…….how far do you think that $300,000 worth of protection is going to go to cover legal fees and possible pay-outs for SEVEN injured people? Assuming that you only have one suite brought against you….how far will that go to cover legal fees and a payout for even one person? The correct answer is: not very far at all. So what should you do to protect your home, assets, and family? We’re glad you asked.

1-) Increase the underlying liability coverage limits on your home policy. Make sure that you are carrying $500,000 on your home policy for liability protection. Why? The difference to go from $300k-$500k per year is only a few dollars different on your home premium. Really the price is negligible for the increase in coverage that you get. However, it’s a big jump in coverage (almost doubled) and it can get you a discount on your Umbrella Policy.

2-) Carry an Umbrella Policy. An Umbrella Policy (aka PUL) goes over the underlying liability limits of your home and auto policies. Nationwide offers a really neat feature for PUL policies called “stackable coverage”. This means that while some companies will only pay out $1 million total if you have a $1 million PUL, Nationwide will pay out the $1million on top of your underlying liability max protection. This means that if you are carrying $500k on your home policy and you have a $1 million PUL, you would have $1.5 million worth of protection. That looks a lot better when facing a situation like the deck accident, doesn’t it?

3-) Carrying a PUL helps ensure you’re not facing this alone. For a situation like the deck accident, the owners of the home could be facing some major legal suites if they are sued by the people that were injured. If they only have a $300k liability limit on their home policy with no PUL, they don’t have much help paying for legal fees or payouts. The insurance company is only on the hook for $300k so it may be easier for the insurance company to simply pay out the $300k and close out the claim. The home owner would get no more payouts on their insurance after the $300k was paid. Scary, huh? Now assume that the insurance company is facing a $1.5 million payout for a claim. It is now drastically more in their interest to try to reduce the claim payout. What does this mean for you? The insurance company is in there fighting to get the claim payout reduced just as much as you are.

4-) Practice safety. In this case, the article states that there was no known damage or recorded damage to the deck from any prior inspection. As a home owner, it is prudent to maintain your property and reduce the things that could pose hazards. For example, make sure that if you have a pool it is gated, fenced in, and that children are always supervised. If you have damage to a patio or deck, be sure to fix the problem or block the entrance so your guests are not risking injury. Taking steps to reduce injury for your guests can help reduce the liability exposure to your family and your home.

 

If you have any questions, please do not hesitate to contact us.  We would love the opportunity to help you and your family be better protected from life’s uncertainties.

 

All the Best,

Kelley Carter, CPIA

 

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The Braun Agency’s mission is to help you get from where you are to where you want to be financially by planning, achieving your plan and protecting your plan from unexpected events.  In the process, our goal is to deliver insurance services in a manner that exceeds your expectations.  See what The Braun Agency can do for you today. Give us a call at 757-452-4563 to speak with one of the licensed, professional members of our team or request a contact here. The Braun Agency. We’re on YOUR side. 757-INSURANCE.